Indian Hotels to acquire remaining stake in ELEL from Nanda family

IHCL’s board of directors on November 11, 2019 approved the terms for the settlement to acquire 14.28 per cent shareholding
The Indian Hotels Company has signed a binding agreement for the acquisition of the remaining 14.28 per cent equity interest in ELEL Hotels and Investments Limited (ELEL) from the Nanda family, Indian Hotels said in a statement on Tuesday.  This will make IHCL the 100 per cent leasehold owner of the landmark Sea Rock hotel site by December, 31, 2021, it said. It was taken over by IHCL’s subsidiary company in 2009.

“The visionary redevelopment of Sea Rock promises to be not only another defining landmark in India’s commercial capital of Mumbai, but also an opportunity to build an iconic sea front hotel in South Asia,” Puneet Chhatwal, managing director and chief executive officer, IHCL said.

IHCL’s board of directors on November 11, 2019 approved the terms for the settlement to acquire 14.28 per cent shareholding.

The payment will be structured through multiple installments staggered over a period, with full buyout by December 31, 2021. This settlement will ensure 100 per cent control of the shareholding.

IHCL did not disclose the acquisition price. A disclosure in the company’s latest annual report said that the company would pay Rs 250 crore for the deal. This values the property at over Rs 1,666 crore, which is more than double the Rs 800-crore valuation it got in 2009.

While the buyout paves the way for execution of the long-pending project, IHCL has yet to cross other hurdles. The owner of the Taj chain of five star hotels is also fighting a public interest litigation (PIL) over the use of floor space index (FSI) for this property. Environmental clearance is also awaited for the project.

The hospitality major has plans to make it an iconic property similar to Colaba’s Taj Mahal Palace, and merge it with the Taj Lands End, located in the suburb of Bandra, with over 1,000 rooms and a convention centre. However, multiple glitches have stalled the project execution.

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