The State Bank of India (SBI), the largest bank in the country, has picked up 19.7 per cent equity in Orissa-based Mayfair Hotels and Resorts (MHRL) through a private equity (PE) deal. The deal was for 37,33,333 shares with a face value of Rs 10 each. However, the total value of the deal is not known. The shares acquired by SBI are from the fresh shares issued by the company. As a result, the subscribed equity base of the company has increased to 1,89,33,333 shares from 1,52,00,000 shares previously. Post-deal, the promoters' share will be 80 per cent. The decision of SBI to acquire the stake in the leading hospitality player in eastern “SBI picking up the equity is an indicator of their confidence in our enterprise and management,” Dilip Ray, chairman and the managing director of MHRL, said. He said, the company plans to hit the capital market with an initial public offer (IPO) in about 24 to 36 months after utilisation of the proceeds of the 19.7 percent equity issued to SBI. The timing of the IPO will depend on the market condition. The group is in the process of executing a Rs 260-crore expansion plan. While the company intends to raise about Rs 124-150 crore from the proposed IPO, the borrowing component is likely to be about Rs 65 to 75 crore. The remaining funds will be mobilised in the form of internal accruals. The new 5-star deluxe property of Mayfair Gangtok, developed by a subsidiary, is expected to be commissioned by March 2009. Meanwhile, the company has forayed into western MHRL has been achieving an annual growth of 22 per cent for the past four years and has completed the expansion of its four operative properties at The company achieved a turnover of Rs 48.5 crore in 2007-08 with a net profit of Rs 9.27 crore. Despite the slowdown, it hopes to achieve a turnover of Rs 60 crore in 2008-09 with expected net profit of Rs13 crore. “Nowhere the slowdown has impacted our business. We have 100 per cent occupancy in our |
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