NEW DELHI: The Sahara Group will bid for theTajMansingh hotel in central Delhi if it is put up for auction by the property's owner NDMC, Subrata Roy, chairman of diversified group, told ET in an exclusive interview this week.
"We are definitely after it, we are working on it...If the hotel property is auctioned, we will go for it," Roy said at his residence in Lucknow.
The group's interest in the hospitality sector is well known after a series of recent acquisitions in the US and the UK, including the Grosvenor House and New York's The Plaza.
The Taj Mahal hotel on Mansingh Road in Delhi is now operated by the Tata Group's hotel arm Indian Hotels Company under a lease agreement with the New Delhi Municipal Corporation (NDMC). The civic body is, however, considering a plan to auction the hotel after Tata's 33-year lease, plus a year's extension, ends this year.
"For a property like this, we will be willing to offer a good price," Roy said.
He did not disclose the price that such a prime property would fetch, preferring to just say that a group of key professionals has been set up to chalk out a plan that would make the group India's biggest hotel company with domestic and international assets. "Eighty percent of these hotels would be in India, of which a majority would be greenfield," he added.
Sahara now owns the 223-room Sahara Star hotel that sits on 7.42 acres adjacent to the Mumbai domestic airport. It is no by means certain whether it will get the Taj Mansingh property considering the complications involved and the Tata Group's determination to retain it.
The purchase, however, will boost the company's hospitality plans and go a long way in furthering its emergence as one of India's biggest companies.
The Tata Group and NDMC are locked in a dispute about renewing the former's licence first signed in 1978. NDMC financed the construction and subsequent renovations of the hotel property and also receives a share (10.5% of the hotel's gross turnover).
NDMC had appointed E&Y as the transaction advisor for the Mansingh Road property asking it to determine the value and to explore other options such as finding another partner or even auction of the land and the landmark hotel.
ET had reported some time ago that the Tata Group has sought the opinion of eminent lawyer Harish Salve to determine whether Taj had the right of first refusal in case of an NDMC auction.
Taj currently pays 10.5% of the hotels gross turnover to NDMC and the number is expected to go up substantially after E&Y's valuation of the property. An NDMC official said he was not in a position to comment on Sahara's interest. "It is too early to comment," he said.
The Indian hospitality sector, especially in the five-star and luxury segments, is currently going through a rough patch with profitability declining due to the economic slowdown. "The performance of the hotels industry is intrinsically knit with the economic growth," says a recent ICRA report on the sector.
According to the report, the April-December 2011 period has been one of the weakest nine-month periods in over five years because of muted average room rates and high costs.
(Source- http://economictimes.indiatimes.com)
"We are definitely after it, we are working on it...If the hotel property is auctioned, we will go for it," Roy said at his residence in Lucknow.
The group's interest in the hospitality sector is well known after a series of recent acquisitions in the US and the UK, including the Grosvenor House and New York's The Plaza.
The Taj Mahal hotel on Mansingh Road in Delhi is now operated by the Tata Group's hotel arm Indian Hotels Company under a lease agreement with the New Delhi Municipal Corporation (NDMC). The civic body is, however, considering a plan to auction the hotel after Tata's 33-year lease, plus a year's extension, ends this year.
"For a property like this, we will be willing to offer a good price," Roy said.
He did not disclose the price that such a prime property would fetch, preferring to just say that a group of key professionals has been set up to chalk out a plan that would make the group India's biggest hotel company with domestic and international assets. "Eighty percent of these hotels would be in India, of which a majority would be greenfield," he added.
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The purchase, however, will boost the company's hospitality plans and go a long way in furthering its emergence as one of India's biggest companies.
The Tata Group and NDMC are locked in a dispute about renewing the former's licence first signed in 1978. NDMC financed the construction and subsequent renovations of the hotel property and also receives a share (10.5% of the hotel's gross turnover).
NDMC had appointed E&Y as the transaction advisor for the Mansingh Road property asking it to determine the value and to explore other options such as finding another partner or even auction of the land and the landmark hotel.
ET had reported some time ago that the Tata Group has sought the opinion of eminent lawyer Harish Salve to determine whether Taj had the right of first refusal in case of an NDMC auction.
Taj currently pays 10.5% of the hotels gross turnover to NDMC and the number is expected to go up substantially after E&Y's valuation of the property. An NDMC official said he was not in a position to comment on Sahara's interest. "It is too early to comment," he said.
The Indian hospitality sector, especially in the five-star and luxury segments, is currently going through a rough patch with profitability declining due to the economic slowdown. "The performance of the hotels industry is intrinsically knit with the economic growth," says a recent ICRA report on the sector.
According to the report, the April-December 2011 period has been one of the weakest nine-month periods in over five years because of muted average room rates and high costs.
(Source- http://economictimes.indiatimes.com)
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