Tata Groups' IHCL seeks RBI’s approval to rejig overseas assets for fund raising

Tata Group’s hotel arm, Indian Hotels has sought Reserve Bank of India’s approval to restructure it’s international operations to bring them under an umbrella company, sources with direct knowledge said. IHCL wants to form a holding company for the overseas business and sell up to 49% stake to raise funds for the debt-ridden company. This is the company’s second attempt at getting RBI’s nod for the proposal.

IHCL has consolidated debt of Rs 3800 crores, sources suggest that the company wants to monetize the international operations to repay a part of the debt. Currently, the overseas assets are held by different holding companies and that needs to be restructured via transfer of shares within the company.

The overseas operations include management contracts across the globe and five distinct asset purchases for which IHCL has spent around Rs 3000 cr. International assets include ownership of Campton Place Hotel, Taj Boston, Starwood. They also have a Management contract of The Pierre on which the company spent on renovation. Minority stake in Orient Express is also part of key international assets of the company. Overseas operations contribute to about 25% of the revenues but are a drag on the profits.

When contacted, IHCL declined to offer a comment. Indian Hotels’ stock reacted positively when ET Now broke the story during the trading hours on Thursday.