Temasek arm to pick up 21.74% in GL Hotels

MUMBAI: Dunearn Investments (Mauritius), a wholly-owned subsidiary of Asia investment firm Temasek Holdings, is acquiring a 21.74% stake in GL Hotels for Rs 125 crore. Mumbai-based GL Hotels, promoted by the Ghais of the Kwality and Gaylord restaurant fame, now operates the boutique Intercontinental (IHG) Marine Drive in south Mumbai.

It is foraying into boutique and lifestyle hotels and is understood to be talking to a number of global hospitality majors for the same.

The board of GL Hotels recently cleared its expansion plan for the next 3-5 years involving a first phase investment of around Rs 600 crore. To fund the first phase, GL Hotels approved the issue of warrants to Dunearn Investments to raise Rs 210 crore and an additional Rs 400 crore would be raised through debt and internal accruals.

After the recent amalgamation of its banqueting business( Mayfair) with GL Hotels, IHG’s stake has reduced to around 5% from 12% in GL Hotels.

GL Hotels, which recently got out of its restaurant business, is currently concentrating on two businesses — hotels and banqueting. It also operates four signature food & beverage outlets, Dome, Kebab Korner, Corleone and the Czar.

“Temasek’s investment will enhance growth into the hotels and banqueting divisions and maximize opportunities to explore expansion plans,” says Joint MD Gaurav Ghai. Edelweiss is the exclusive financial advisor to this transaction.

“We are ready to expand to face the challenges of the ever growing hospitality sector by having 10 boutique hotels and at least 25 Mayfair banquet units over the next three to five years.

This strategic investment comes at an opportune moment,” says chief executive of GL Hotel Raman Mehra. Private-equity funds like Warburg Pincus, Kotak Securities, Bessemer have now become major players in the hospitality sector and have invested in a number of hotel companies like Sarovar, Red Fox, Lemon Tree, Royal Orchid in the recent past.