Bharat Hotels raises Rs 164 cr through private placement of equity shares
In a bid to fund its Rs 1000 crore expansion plan, Bharat Hotels has raised Rs 164 crore through the private placement of equity shares in Dubai Ventures, a subsidiary of Dubai Investment Group. The company has issued 5.4 per cent equity of the expanded paid up capital, resulting in a market capitalisation of over Rs 3000 crore.
At Rs 407 crore, the company has registered 35 per cent growth in revenue in 2006-07 with gross operating profit of 55 per cent. During the current financial year, the company's annual revenue is expected to be in excess of Rs 550 crore.
After this private placement, the rest of the funds for the expansion plan will come from a combination of internal accrual and debt, sources said. The entire fund would be required over the next three years.
Bharat Hotel is one of the leading hotel chains in the country,operating its hotels under the brand name of 'The Grand'. It currenly runs eight luxury hotels. Six projects are under construction. The company is also negotiating for five more properties in Hyderabad, Amritsar, Chennai, Pune and Gulmarg, according to highly placed sources close to the group.
Commenting on their expansion plan, Jyotsna Suri, Chairperson and Managing Director of Bharat Hotels said, "Our expansion is in line with our endeavour to be present in key tourist and business destinations."
The company has formed a joint venture with Dubai based real estate developer Nakheel to set up a five star hotel in Dubai. The hotel is expected to open in 2009. The company has also acquired 165 years old The Grand Eastern in Kolkata, which is presently under extensive restoration.