Indian Hotels to sell Taj Boston for at least Rs 836 crore
Net loss before tax for the Boston-based property has widened to $7.3 million in 2015-16.
Tata Group firm Indian Hotels Company, which runs Taj group of hotels, on Thursday said the company is planning to sell its Taj Boston hotel for a base price of $125 million (about Rs 836.09 crore).
The board of the company, at a meeting held on Thursday, approved its wholly-owned subsidiary United Overseas Holding's (UOH) plan to "pursue the option of divestment of the Taj Boston hotel by way of sale/disposal of the LLC interests in IHMS (Boston) LLC", Indian Hotels said in BSE filing.
IHMS (Boston) LLC is a direct subsidiary of UOH. The board has also authorised the present management of the company for sale of Taj Boston, the company added.
Price consideration should not be "lower than $125 million to an independent third party, subject to negotiations and execution of suitable agreements", the hospitality major further said.
"The management will seek and evaluate suitable offers from prospective unrelated third-party purchasers who are interested in leveraging the Taj brand," it said.
The company further "intends to negotiate a divestment while retaining brand presence on the hotel on terms to be agreed".
Net loss before tax for the Boston-based property has widened to $7.3 million in 2015-16 as against $6.7 million in 2014-15.
Taj Boston's total revenue in 2015-16 dipped 1.15% to $34.1 million, from $34.5 million in 2014-15. IHC had acquired Taj Boston Hotel in 2006, recognising the importance of the need of presence of brand Taj in the US, which is the single largest source market for the company.
However, global economic recession impacted fortunes of the hospitality sector around the world and its profitability as well, which explains the fact that the company is now focusing on high-margin markets.
"In recent times, the company has been relooking at all options for a course correction in strategy, focusing on growth in high-margin markets, evaluating relevance of some of its existing assets in the portfolio to reduce leverage," Indian Hotels said.