Vascon, 3 other partners exit Pune’s 4 star hotel Holiday Inn

Kailash Babar & Divya Sathyanarayanan, ET Bureau Sep 16, 2015, 10.26AM IST

(Vascon Engineers and three )

MUMBAI: Pune-based Vascon Engineers1 and three other partners in the 4-star business hotel Discount Holidays © Holiday Inn2, Pune, have sold their entire stake for an enterprise valuation of Rs 150 crore. The 176-room property in Hinjewadi locality has been sold to a group with interest in education business across the country. Vascon Engineers was the majority stake holder in the property with a 35% stake, while the other three local partners operating in real estate business together owned 65% in the four-star category business hotel. The partners will receive money after repaying debt worth Rs 90 crore on the property.

Siddharth Vasudevan3, chief operating officer of Vascon Engineers, confirmed the stake sale. “The decision to sell our stake in this property is in line with our strategy to reduce debt. We are looking to raise total Rs 100 crore through the sale of non-core assets, including this property over the next 6-8 months.”

The property has been in operation for the past three years. “The property has the potential for another 100 keys in a separate wing,” Vasudevan added.

Vascon Engineers is planning to raise Rs 200 crore for trimming debt and expanding its real estate business. The company plans to raise half the amount by selling its non-core assets, including land parcels. The company, which has interests in real estate, EPC (engineering, procurement and construction) and clean room partitioning business, recently raised Rs 100 crore through a rights issue. It also owns 20% stake in the five-star property Hyatt Regency4 in Pune5 and 50% stake in the four-star beachfront property Royal Orchid Beach Resort and Spa in Goa. Deals have picked up in the hospitality sector over the past nine months with softening of valuations and improved market conditions, bringing buyers back to the market after more than two years.

According to data from the hotels and hospitality group of property consultancy JLL, 2015 has seen six hotel deals so far compared with just two in 2014 and three in 2013. Some of the major deals that happened this year include Radisson Blu Resort & Spa, Alibaug, being acquired by stock market veteran Radhakishan Damani, investment group SAMHI Hotels’ acquisition of Four Points by Sheraton, Vizag, and ITC’s acquisition of luxury property Park Hyatt Hotel, Goa. The Park Hyatt Goa deal, however, has been caught in a legal battle after the owner of the property Blue Coast Hotels moved the Bombay High Court challenging the auction and got a status quo order.

In the past few years, the hospitality industry in the country had been impacted by the overall slowdown in economy coupled with a sudden rise in inventory in several key cities.

While many hotel owners wanted to sell their properties, the valuations then were based on the real estate and inflation, and they failed to attract buyers.

References

  1. ^ Vascon Engineers (economictimes.indiatimes.com)
  2. ^ Discount Holidays © Holiday Inn (economictimes.indiatimes.com)
  3. ^ Siddharth Vasudevan (economictimes.indiatimes.com)
  4. ^ Hyatt Regency (economictimes.indiatimes.com)
  5. ^ Pune (economictimes.indiatimes.com)

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