AIM-listed India Hospitality Corp. (IHC), which has interests in restaurant and hospitality businesses, is delisting from the London market due to lack of liquidity and attractive fundraising options.
The development comes as IHC sold its flagship airline catering business to Switzerland-based Gategroup Holding AG in November 2010 at a valuation of $92 million.
While IHC initially sold 74 per cent, Gategroup Holding recently exercised its option to buy the remaining stake.
According to IHC, the historical trading activity in the shares does not offer meaningful volumes and a quick, significant acquisition can be delayed due to the process of filing a new document and seeking shareholder approval. Further, the company sees no prospect of raising additional capital on AIM at an acceptable valuation while it is incurring expenses and spending management time to run a listed entity.
For delisting, IHC will need approval of at least 75 per cent of its shareholders in an extraordinary general meeting, to be held on March 5, 2012, in New York.
IHC had announced a special dividend after selling the airline catering company called Skygourmet Catering Pvt Ltd. The company had raised $100 million (about Rs 460 crore) through an initial public offer at the London Stock Exchange in 2006 and in 2007, it acquired Skygourmet and the restaurant chain Mars Restaurants from private equity firm Navis Capital and entrepreneur Sanjay Narang for $110 million.
“Following its divestment of Skygourmet, IHC is now focused around building its future in the food services industry. It intends to continue to exploit the emerging market opportunity offered by the rapidly growing Indian economy – both organically and through acquisitions in this sector both in India and internationally,” the filing stated.
IHC currently operates hotel, restaurant and patisserie business of Wah. Mars Restaurants owns fast food formats like Dosa Diner and Roti besides dining formats like Pizzeria & Pasta Bar and Tendulkar’s. It also owns Gordon House Hotels as part of the Mars Group.