The Hindu Business Line : Asian Hotels board okays demerger

New Delhi April 30 The Asian Hotels board at its meeting on April 28, has approved the demerger of the company resulting in the trifurcation and the creation of two new companies — Vardhman Hotels Pvt Ltd and Chillwinds Hotels Pvt Ltd.

In a statement to the BSE, the company has said that the three undertakings being trifurcated include the Delhi undertaking with about 508 rooms and suites together with an operating lease for BCCI lounge in Kolkata. Besides, the Kolkata undertaking with 235 rooms and suites, together with the investments and development option of Bhubaneshwar and Regency convention centre and hotels limited and cash liquidity of about Rs 462 crore, and the Mumbai undertaking comprising 401 rooms and suites with its investments and development options in Bangalore were also being demerged.

The board also took on record the report prepared by S.S. Kothari Mehta and Company recommending the reconstruction and demerger resulting in trifurcation of the company into three separate undertakings.

Explaining the rationale, the report states that the three undertakings would be broadly equal in their economic earning power.

Capital allotment

The report has also proposed that the board could consider an equal allotment of the issued equity capital in the company and the two resulting companies for the shareholders of the company as of the record date as the determined pursuant to the scheme of arrangement and demerger.

Further, it is proposed that two additional issues of preference shares - of up to Rs 431 crore of optional convertible redeemable preference shares and up to Rs 90 crore of redeemable non-convertible preference shares — would need to be considered by the board for facilitating a trifurcation.

The board decided and considered that the company should convene Extra Ordinary General meeting (EGM) on May 28 for approving an amendment to the authorised share capitalfor permitting the issue of preference shares in the company.

Asian Hotels currently runs the Hyatt Hotel in Delhi and Mumbai, among other cities.

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