Indian Hotels Company Ltd said on Wednesday it has agreed to sell its Taj Boston hotel in the US to AS Holdings LLC, Boston for $125 million (about Rs 840 crore).
The company will use the sale proceeds largely to repay debt, the operator of the Taj luxury hotels said in a stock-exchange filing. AS Holdings is a firm formed by US-based real estate firm New England Development, developer Lubert-Adler and private equity firm Rockpoint Group.
Indian Hotels, the hospitality arm of the Cyrus Mistry-led diversified Tata Group, will continue to operate Taj Boston under a management services pact with the new owners.
The deal comes after Indian Hotels said in May that its board approved a proposal to sell the hotel for not less than $125 million.
The company had acquired the US property then known as The Ritz-Carlton, Boston, in 2006 for $170 million (about Rs 815 crore then) from Millennium Partners. Indian Hotels owns the property through United Overseas Holdings Inc, an indirect wholly owned unit.
The deal is the latest sale by the diversified Tata Group as it sheds loss-making assets and reduces its debt that had ballooned as it expanded its overseas operations through multiple acquisitions in diverse sectors in the first decade of this century.
Tata Steel Ltd, Tata Power Ltd and Tata Communications, besides Indian Hotels, are among the group companies selling overseas assets from the UK to Indonesia.
Earlier this month, Indian Hotels sold a 5.1% stake in Belmond Ltd, the firm that ran an international chain of luxury hotels under the Orient Express banner before it was rebranded, for $49.5 million. In 2014, it sold its Blue Sydney Hotel to Hong Kong-based Hind Group for around $30 million.
Besides the 273-room Taj Boston, the company also has the Campton Place hotel in San Francisco and operates The Pierre in New York. Overall, it operates about 100 hotels in India and overseas, according to its website.
The company posted a consolidated net loss of Rs 60.5 crore on net sales of Rs 4,591 crore for the year through March 2016. Taj Boston posted a pre-tax loss of $7.3 million (about Rs 49 crore) on total revenue of $34.1 million for 2015-16 compared with $6.7 million and $34.5 million, respectively, the year before.
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