May 6, 2009 (The Hindu Business Line) --
Shubhra Tandon
According to a filing with the Securities and Exchange Commission, the Tatas-owned hospitality major agreed to buy the shares for $12.94 million, at $5.75 apiece. The acquisition would be done through IHCL’s wholly-owned subsidiary Samsara Properties Ltd.
Indian Hotels had subscribed to the fresh issue of 15 million Class A shares in an underwriting public offering by Orient Hotels. According to the filing, ICICI Bank (NYSE:IBN) UK plc has agreed to lend Samsara up to $51 million for the acquisition.
“Interest on the ICICI loan accrues on a daily basis at a rate of LIBOR plus 4 per cent per annum. The principal amount of the ICICI loan must be repaid by Samsara to ICICI Bank within three years from the date of the ICICI Loan Agreement,” said the filing.
IHCL declined to comment on the acquisition. In an e-mail to Business Line, the company’s public relations office said: “We won’t be able to comment on this at this point in time.”
When the Tata Group had acquired a 10-per cent stake in the US company, it had proposed a strategic partnership to Orient-Express but was rebuffed.
The initial acquisition having been in the region of $52 dollars a share, the Tatas have made the additional acquisition at a knock-down price, observed an analyst.
There is also a dispute among Orient shareholders, some of whom want the company to amend its bylaws to treat Class B shares, which have “supervoting rights”, as treasury shares.
