Indian Hotels Company Ltd (IHCL) is continuing with its amalgamation programme to reduce the number of subsidiaries within

the company. Oriental Hotels Ltd, will now be able to commence on its planned amalgamation of Covelong Beach Hotel India Ltd and Coromandel Hotels Ltd with itself. All three companies are part of the Taj Group. IHCL received orders sanctioning the company to proceed with the planned amalgamation from the Madras High Court last month. The merger was planned last year and post-merger, the Taj Group will hold 34.5 per cent in Oriental Hotels Ltd. The proposed swap ratio is two shares of Oriental Hotels for every five shares of Covelong Beach Hotels India Ltd. Covelong Beach Hotels is a listed company while Coromandel Hotels Ltd is a 100 per cent subsidiary of Oriental Hotels. The merger is expected to reduce costs and raise savings by combining resources in different areas of operations. It is expected that post-merger, the revenues of Oriental Hotels Ltd, as the merged entity would be called, will be higher by approximately 15 per cent. The merger is also expected to enhance shareholder value for Oriental Hotels, as it would increase the asset base and net worth of the company. The shareholders of Covelong Beach Hotels are expected to benefit through an increase in value of their holding as well as through greater liquidity that the Oriental Hotels Ltd stock provides. Oriental Hotels has ownership of Taj Coromandel (Chennai) and has management licenses of the Taj Malabar (Kochi), Fisherman’s Cove (Chennai) and the Taj Residency (Vishakapatnam). Coromandel Hotels Ltd owns the Taj Residency, which it licenses to Oriental Hotels Ltd. Covelong Beach Hotels India Ltd which owns the Taj Garden Retreat (Coonoor), has management licence for the Taj Garden Retreat (Madurai) and the Taj Manjuran (Mangalore). As per the laws governing amalgamation processes, Oriental Hotels Ltd had filed the order, allowing the amalgamation, with the Registrar of Companies, Tamil Nadu.

The Indian Hotels Company Ltd (IHCL) has begun consolidating its investments companies as a part of its restructuring exercise. Taj Trade Investments Ltd and Taj Holdings Ltd both investment companies under the Taj umbrella are being amalgamated into Taj Investments Ltd. The latter is also an investment company. IHCL spokesperson when contacted confirmed the development. According to the spokesperson, the amalgamation of the two investment companies into Taj Investments Ltd is a part of IHCLs strategy to reduce the number of its subsidiaries. The companies have submitted their proposals for amalgamation to the Bombay High Court which is yet to pass its order. The spokesperson, however, did not comment on the savings that will accrue to IHCL post amalgamation of these subsidiaries. IHCL is also focusing on restructuring of companies forming the Taj group including holding structure of the company. The move is part of the initiative chalked out by the company in the previous fiscal. Among other initiatives by the group are selective strategic acquisitions that meet stringent financial criteria, renovations and brand relaunch, and reduction in interest costs through restructuring debt and sale of idle and non-performing assets. IHCL is also continuing with its amalgamation programme to reduce the number of subsidiaries within the company. Under the programme, Covelong Beach Hotel India Ltd and Coromandel Hotels Ltd have been amalgamated with Oriental Hotels Ltd. All three companies are part of the Taj Group. IHCL has already received orders sanctioning the company to proceed with the planned amalgamation from the Madras High Court. These mergers are also expected to reduce costs and raise savings by combining resources in different areas of operations. Key initiatives outlined by the company include reduction of interest cost and reduction in gross interest expense. This was to be done by reduction in working capital excluding cash parked as inter-corporate deposits (ICDs).