EIH may merge arms to raise stake to 51%

The Oberoi-owned EIH is considering the merger of some subsidiaries with the company to help the promoters increase their stake to 51 per cent. ITC Ltd holds more than 14 per cent stake in EIH through some investment arms.

Chairman and CEO P R S Oberoi said the company was seriously thinking of merging the subsidiaries with EIH.

"We are looking at it and are evaluating the outcome. This is the trend of today's corporate world as it simplifies accounting and saves money," he said.

The promoters recently picked up around 3.70 per cent stake in EIH Ltd through a block deal. The family now holds around 46.5 per cent stake following the acquisition, up from 42.6 per cent earlier. The promoters acquired the shares through Oberoi Hotels (P) Ltd, a group investment company that holds around 23 per cent in EIH Ltd.

EIH has six subsidiaries "" Mercury Travels Ltd, Mashroba Resort, Rajgarh Palace Hotel and Resorts, Oberoi Kerala Hotels and Resorts, EIH International and Mymtaz Hotels.

Managing director and vice-chairman of EIH, S S Mukherjee, said the company was likely to merge the wholly owned subsidiaries first.

Later, it may talk to partners in other subsidiaries for a merger.

The EIH wholly-owned subsidiaries were Mercury and Rajgarh Palace Hotels. EIH holds 60 per cent to 80 per cent stake in the remaining four subsidiaries.

"EIH has some other partners in four subsidiaries. We have to talk to them for merger, but the wholly owned subsidiaries could be merged before this," he said.

The Oberoi family was keen on raising its stake in EIH through creeping acquisition for the last couple of years.