London Stock Exchange-listed hospitality and leisure company Indian Hospitality Corp has assumed direct operating control of its subsidiaries — Mars Restaurants Pvt Ltd (MRPL), Mars Catering and SkyGourmet — from current president and restaurateur Sanjay Narang.
The step has been taken after the disengagement of the operating agreements between IHC's operating companies Mars Restaurants Pvt Ltd and SkyGourmet Pvt Ltd, and Sanjay Narang-promoted Mars Catering Services Pvt Ltd, IHC said in a statement posted on its website.
As per the agreement entered in July 2007, Narang was to continue as President of Mars Restaurants and SkyGourmet for a minimum period of two years. The new arrangement is valid from July 31, 2009, the IHC statement said.
"Sanjay Narang and Arvind Ghei have now ceased to act as President and Chief Financial Officer of the operating companies, respectively, following the disengagement of agreements," it added.
Narang will, however, be appointed as honorary non-executive chairman of the airline catering business SkyGourmet for a period of two years for "the purpose of providing a smooth transition and business continuity."
IHC had acquired Mars Restaurants in 2007 for $110 million, in which Narang held 26 per cent stake. The company entered into agreement with Mars Catering in July 2007 and the for a minimum period of two years, the statement said.
"With this transition, IHC moves to its next phase and acknowledges the valuable contribution made by Sanjay Narang and Arvind Ghei. Supported by a strong operating organisation, customers and a clear future strategy, we look ahead with optimism," IHC Chief Executive Officer Ravi Deol said.
"Following the disengagement of the agreements, the restaurant locations being used by Not just Jazz by the Bay, Pizzeria Pasta Bar and Just Around the Corner, owned by Sanjay Narang, will be transferred back to Narang as per the original contract," the statement said.
IHC has entered into an agreement with Narang under which the company will franchise these restaurant brands to Narang for a period of one year.
"This arrangement will provide IHC with the opportunity to maintain a continued presence in these restaurants in Mumbai, whilst new locations are identified within the city," it said.
The company will, however, continue to directly own and operate its bakery chain Birdy's. IHC's subsidiary MRPL has also entered into a licence agreement with Narang for the continued use of one of the brands — Gordon House — in his Mumbai property, Hotel Sahar, for two more years.
"Additionally, the Company has extended the existing agreements with Narang for IHC to continue to directly manage the operations of the Gordon House Hotel in Colaba," IHC said.
Besides, Narang is restricted from venturing into the airline catering business for two years.
"As a result of the disengagement of the agreements, Narang and his affiliated entities shall be bound by exclusivity, non-compete and non-solicit restrictions relating to SkyGourmet for a period of two years," IHC said, adding that this will enable the company to develop its existing relationships in the sector.
