A photo of the Taj Mansingh
The auction of Delhi’s iconic luxury hotel Taj Mansingh will be held on June 19, according to the new dates announced by New Delhi Municipal Council (NDMC), the capital’s civic body which owns the land. The auction of this hotel was postponed by the Council a number of times after the first tender was brought in December last year. Prospective bidders had objected to certain terms and conditions. The tender subsequently lapsed.
Interested parties can submit the bids between May 18 and June 7. NDMC will conduct a site April 25 and May 10. This will be followed by a pre-bid meeting on May 11. The e-auction will be facilitated by MSTC and SBI Capital Markets will be the transaction advisor.
One of the issues in the previous tender was with regard to a condition that restricted the winner from making any structural changes to the property. Interested players also had an issue with the restrictive nature of the process, which insisted that bidders must have a five-star hotel brand as well as at least 500 rooms across three properties. Some of the leading global hotel brands and asset firms present in the country could not participate due to this.
Also, according to the earlier conditions, two bidders must not have a cross-holding of 5 per cent and beyond between them. ITC Hotels owns 14.98 per cent in EIH (Oberoi Hotels) and, as a result, only one of the two could be eligible. But both were keen to bid for the hotel in Lutyens’ Delhi. Samhi, a hotel asset company backed by Goldman Sachs, was also keen, but could not participate due to non-ownership of a luxury hotel brand. Saraf Hotel Enterprises, a leading hotel owner, also could not participate.
Tata group’s Indian Hotels, the current operator of 292-room Taj Mansingh, had signed a lease agreement with the NDMC in 1976 and the hotel was inaugurated two years later. In 2011, the 33-year-old lease ended. When NDMC decided to auction the property, Indian Hotels challenged the decision in the Delhi High Court. After much back and forth and several lease extensions, the Supreme Court approved the auction last April.