Aug. 3, 2009 (The Hindu Business Line) --
, Chairman, Indian Hotels Company Ltd, and Mr Raymond Bickson, Managing Director and CEO, addressing the company’s AGM in Mumbai on Monday. Mr Tata said the company could look at new ways to service its debt. “The options could be equity, quasi-equity, etc.
“The options could be equity, quasi-equity, etc,” said Mr Ratan N. Tata, Chairman, in response to a shareholder’s query at the 108th annual general meeting here on Monday.
As of March 31, 2009, IHCL’s total borrowings, according to the annual report, were Rs 1,766.47 crore (Rs 1,134.18 crore). The increase in debt was on account of ongoing capital expenditure on new projects as well as renovations and investment in global arms.
The debt-equity ratio as of March 31 was 0.58:1.
On investments in the US-based Orient-Express Hotels (NYSE:OEH) , Mr Tata said the management hopes that these would turn out to be “valuable”.
He said this was a long-term investment that would hopefully become “strategic”.
“We have many common attributes and approaches to business and we will come closer over time,” he added.
IHCL had recently bought 2.25 million Class-A shares of the US-based Orient-Express Hotel, in which it had acquired 11.5 per cent for $247 million in late 2007. The hospitality major agreed to buy the shares for $12.94 million at $5.75 apiece.
Mr Tata said IHCL would continue to face a challenging environment in 2009-10. “The slowdown continues to impact us and some hotel rooms are still out of commission,” he said.
In 2008-09, it had suffered a double whammy of the global economic slowdown and terror attacks in Mumbai.
The company has put a freeze on recruitments and salary hikes this fiscal. The annual report says it is looking at filling most positions in new hotels through internal redeployment.
“We would be saving in excess of Rs 15 crore with these initiatives during the year,” Mr R.K. Krishna Kumar, Vice-Chairman, told Business Line on the sidelines of the AGM.
He added that there had been no lay-offs during the slowdown.
IHCL has marginally improved its room-to-employee ratio from 1:3 to 1:2.7.
