MBD Group sells Airport Hotel for close to Rs 100 cr
MBD Group sells off the airport hotel in Kolkata for an undisclosed sum after running it for about two years, reports Jaidev Majumdar.business Updated: May 19, 2007 20:18 IST
It's official. The MBD Group has sold off the airport hotel in Kolkata for an undisclosed sum after running it for about two years. The new owner of the prime property is the Noida-based Rs 1,200 crore Dharampal Satyapal (DS) Group.
The MBD Group, which has expertise in the publishing business, had acquired the 4-star deluxe hotel located close to the Netaji Subhash Chandra Bose airport from India Tourism Development Corporation (ITDC) for Rs 20.15 crore in July 2002, following the government's disinvestments policy.
MBD had closed down the hotel in 2004 citing renovation work, after all its 281 employees agreed to accept the voluntary retirement scheme offered by the company. The new owner of the property — food and beverage major DS Group — has conceived grand plans to construct a budget hotel, a 5-star hotel and a snazzy convention centre in the 7.5-acre premises, which is currently awaiting clearance from the government. DS Group is likely to make an announcement on its plans late next month.
Industry sources pointed out that MBD had been struggling to run the hotel right from the beginning, mainly because of its relative inexperience in running hotels, which ultimately prompted the group to sell it off. MBD officials were unavailable for comments but as per market estimates, the land alone would have fetched MBD Rs 50 crore. "The assets would have cost them another Rs 50 crore," said a valuation expert.
When contacted, DS Group's vice-president corporate communication Ms Bhavna Sood confirmed the development but refused to disclose the sum it paid for the hotel. "We have huge plans for the Kolkata property but things are still at a planning stage. We will make an announcement the moment we get the necessary clearance from the government," Ms Sood said.
The DS Group has recently made a foray into the hospitality segment with its newly set up arm DS Hotels Ltd and has upcoming projects lined up in Jaipur, Udaipur, Shimla, Manali and Goa, among others. As per plans, the DS Group will project the Kolkata property as a "destination centre" with the project up and running by 2010. "We are looking at a new 5-star brand and will appoint management contracts to international partners. There is a lot of potential for doing business there," Ms Sood said.