Within a year of foraying into the high growth hospitality sector, Mukesh Ambani-led Reliance Industries (RIL) will team up with EIH to set up hotels in India at an estimated investment of Rs 700 crore.
"In all probability we will develop the Bangalore and Goa projects in association with RIL," EIH Chairman and Chief Executive PRS Oberoi today said on the sidelines of the company's AGM here.
RIL had last year picked up 14.8% stake in EIH that operates hotels and resorts under Oberoi and Trident brands to ward off a potential take over threat from ITC which currently holds 14.9% stake in EIH.
The Securities and Exchange Board of India (Sebi) has however raised the threshold trigger for offers from 15% to 25%.
Addressing the company's shareholders, Oberoi said: "I assure you ITC will not take over (EIH). We wanted a friendly investor and now Ambani who is a friend of mine is an important and friendly shareholder."
Reacting to the new takeover code, ITC Chief YC Deveshwar at his company's AGM last month, had said the company was open to it (raising stake in EIH) if the opportunity was good.
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Asked if RIL would raise its stake after the revision in the takeover code, Oberoi replied, "We will be happy if they raise the stake."
EIH is also open to offer a berth on its board to RIL but it was up to RIL to decide.
Providing details of the proposed joint hotel projects Oberoi said the property in Bangalore would have 250 rooms, the one in Goa will have 100 rooms and both will be managed by EIH.
"We have land in both locations...We have 8.2 acre in Bangalore and 55 acre in Goa. Currently, each room costs Rs two crore for Oberoi brand hotels without land," Oberoi said.
The combined investment for both properties is estimated to be around Rs 700 crore.
Oberoi, neither provided details of the proposed shareholding of the two companies in the projects, nor did he comment on whether a separate company would be floated for the same.
EIH's shares closed at Rs 86, up 1.77% from the previous close on the BSE.