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Indian Hotels Company Announces 100% Acquisition of Sea Rock Hotel Site

NEW DELHI: The Indian Hotels Company (IHCL) announced on Tuesday that it had signed a binding agreement to acquire the remaining 14.28% stake in ELEL Hotels and Investments Limited (ELEL) from the Nanda family, which will make IHCL the 100% leaseholder of the Sea Rock Hotel site by December 31, 2021.

“The visionary redevelopment of Sea Rock promises to be not only another landmark in India’s commercial capital of Mumbai, but also an opportunity to build an iconic beachfront hotel in Southeast Asia,” said Puneet Chhatwal, Managing Director and CEO of IHCL.

In November 2019, the IHCL Board of Directors approved the terms of the settlement for the acquisition of the 14.28% stake. The payout will be structured in multiple installments over a period, with full redemption by Dec.31, 2021, IHCL said and added that the settlement will ensure 100% control of the shareholding.

IHCL’s plans to rebuild the hotel site were blocked after the National Green Tribunal (NGT) suspended permissions granted to it last year citing a violation of coastal zone regulations (CRZ ).

In 2009, IHCL announced the acquisition of the former Sea Rock Hotel for Rs 680 crore by acquiring an 85.72% stake in owner ELEL. At the time, IHCL announced its intention to build a hotel and convention complex on the hotel site and integrate it into the neighboring Taj Land’s End.

The acquisition had also featured in Cyrus Mistry Tata’s board battle with Mistry alleging that the deal had eroded almost all of IHCL’s equity for three years.

Cyrus Mistry, in his letter to the Tata Sons board of directors in 2016, said: “IHCL, beyond its failing international strategy, had acquired the Sea Rock property at a very inflated price and housed in an off-balance sheet structure. . In the process of disentangling this inheritance, IHCL has had to write down almost all of her net worth over the past three years. This affects its ability to pay dividends.