Hotels With Ocean Views VA|"Tatas’ Orient-Express Hotels Investment Value Plunges"

Source              :    timesofindia.indiatimes.com
Category         :    Hotels With Ocean Views VA
By                   :    Reeba Zachariah
Posted By      :    Hotels in Virginia Beach North Courtyard

Hotels With Ocean Views VA

The value of Indian Hotels Company's (IHCL) six-year old stake in Orient-Express Hotels has reduced by two-thirds, further narrowing the options India's largest hospitality chain has for the British hotels-to-trains group. IHCL, known best for operating the Taj chain, holds about 7% stake in Orient-Express, which is now worth $86 million based on the NYSE-listed firm's Friday closing price. According to IHCL's latest annual report, its cost of acquisition towards Orient-Express shares was $262 million. Global economic conditions eroded the value of its investment, which the operator of the Taj Mahal Palace in Mumbai and the Pierre Hotel in New York had made in September 2007. It initially had acquired 11.5% in Orient-Express but its stake came down owing to an expansion in the luxury hotels group's equity capital. 

Since 2007 IHCL had been eyeing a larger play in the Hamilton, Bermuda-registered hospitality chain as a way to bolster its presence in the global hospitality space. On its part, Orient-Express is not keen on an alliance with IHCL and is focusing on expanding its portfolio, growing earnings and boosting its stock price. In October 2011, IHCL made a $1.86 billion bid for control of Orient-Express but the proposal was turned down by the latter. IHCL along with other international investors had offered $12.63 a share of Orient-Express. It was the second time Orient Express management had given the cold shoulder to the Indian company. The first time was in 2007. 

Shares in Orient-Express, which manages more than 30 properties in different parts of the world including the Copacabana Palace in Rio de Janeiro, have fallen 81% from their peak of $64.80 in October 2007 before the global financial crisis. The stock closed at $12.10 on August 30 in New York exchange. IHCL has recognized the diminution in the value of its Orient-Express investment in its books during the quarter ended March 31, 2013. Recently, IHCL said it intends to review the options on its Orient-Express investment. The company, however, is not in favour of selling the shares as the timing is highly disadvantageous.

Source :timesofindia.indiatimes.com/business/india-business/Tatas-Orient-Express-Hotels-investment-value-plunges-by-67/articleshow/22217817.cms