East India Hotels plans tie-up with RIL

August 10th, 2011 - 12:14 am ICT by IANS  

Kolkata, Aug 09 (IANS) Hospitality major East India Hotels, the flagship company of the over Rs.1,100 crore Oberoi Group, plans to tie up with the Mukesh Ambani-led Reliance Industries to build and manage several star hotels and over 150 luxury apartments, according to a top official.

“We would most likely set up a new joint venture firm with Reliance Industries for developing a 250- room five or seven star hotel in an upscale Bangalore locality,” company chairman P.R.S. Oberoi told mediapersons on the sidelines of its 61st Annual General Meeting here.

Oberoi said the Rs.500-crore hotel will come up on 8.2 acres owned by his group within the next one and half years.

The two companies would also jointly build 100 luxury apartments in Goa beach-front and another 60 in Bangalore for outright sale. The Goa venture would entail a total investment of Rs.600 crore.

The Oberoi Group would provide all infrastructural facilities and manage the hotel and apartments, he said.

In a move to aid cost efficiency in its future hotels, EIH would delve into realty projects. “The land prices are very high. So only hotel project will not be viable,” Oberoi said.

The company has also decided to go for multi-use of land to reduce the project value.

Dwelling on the company’s overseas expansion plans, Oberoi said other than coming up with 250-room hotels each in Dubai, Marrakesh (Morocco) and Casablanca with local partners, it was also eyeing star hotels in the Chinese cities of Beijing and Shanghai.

The company was also setting up two hotels in the cyber city of Hyderabad, a new flight kitchen in New Delhi International Airport, besides two hotels in Oman and Abu Dhabi. It was also setting up a luxury forest lodge in Karnataka.

In Eastern India, the company was scouting for suitable land and a partner for setting up two more hotels under the Oberoi and Trident brands by pumping in Rs.800 crore in the city’s north eastern fringes of Rajarhat.

He said both the hotels will start operation within the next couple of years

Oberoi emphatically denied any possibility of ITC Ltd attempting to take over managemernt of EIH Hotels by raising its stake from around 14.98 percent. The Oberois own 34 percent of the shares.

“Like Reliance, ITC is a friendly investor,” he said.

In the first quarter of 2011-12, the company’s Profit Before Tax has gone up to Rs.14.95 crore as against a Rs.28 crore loss in the year ago period.

The company’s revenue has also seen a 25-percent leap to Rs.255.84 crore in the April-June 2012 from Rs.205.16 crore in the corresponding period of the previous fiscal.

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