Asian Hotels okays three-way split

Asian Hotels, India's third- largest hotel chain and promoter of the Hyatt brand of hotels in South Asia, has approved a three-way split of the company in its board meeting held on Monday.

The hotel major (in its earlier board meeting on April 28) had approved the demerger resulting in the creation of two new companies - Vardhman Hotels and Chillwinds Hotels. Investors holding 10 shares in the company will get five shares in each of the three proposed units.

The three units will each have equity share capital of Rs 11.40 crore ($2.8 million), the New Delhi-based company, informed the Bombay Stock Exchange on Tuesday. The equity plan will enable each unit to list separately on the stock exchanges.

In a statement to the BSE earlier, the company had said that the three undertakings being trifurcated include the Delhi undertaking with about 508 rooms and suites, the Kolkata undertaking with 235 rooms and suites, and the Mumbai undertaking comprising 401 rooms and suites with its investments and development options in Bangalore were also being demerged.

The company will be raising fresh capital of Rs 521 crore. Of this, Rs 311 crore will be raised through issuance of fully convertible preference shares on preferential allotment basis to Yans Enterprises, one of the promoters and Rs 30 crore will be raised through issuance of fully convertible preference shares to independent private equity investors.

The company will also raise Rs 90 crore by issuing non-convertible preference shares to Infrastructure Development Finance Company or any other institution/bank. It will raise another Rs 90 crores through issuance of non-convertible preference shares to Magus Estates and Hotels.

The money raised will facilitate a trifurcation between its three promoters"" Sushil Gupta, Shiv Jatia and Umesh Saraf. Asian Hotels runs the Hyatt Hotel in Delhi, Mumbai, and Kolkata.