The InterContinental Group, owner of the Holiday Inn brand of hotels, is raising about Rs 150 crore via a local franchisee to set up a four-star Holiday Inn hotel in the temple town of Tirupati, according to private equity sources.
Tirupati has over the years emerged as a high-spending religious and tourist destination.
InterContinental's builder franchisee has already raised Rs 130 crore of the total capex for the proposed venture via term loans from banks, according to private equity sources. The franchisee has closed the loans in recent months, and is looking at the property becoming operational by the fourth quarter of calendar 2009.
The franchisee is looking at arranging the remaining Rs 20 crore by way of raising either private equity or tapping debt from the primary markets. The property will have a mix of rooms and suites, sources said. InterContinental officials could not be accessed for comment.
The franchisee is currently in the process of securing the requisite state government and local permits on behalf of the InterContinental Group to move ahead with the Tirupati project which has a tentative commencement date of October 1 this year, according to sources.
UK-based InterContinental group, which is the world’s largest hotel operater by number of rooms, owns the brand name Holiday Inn, which generally licenses the name to franchisees and third parties who operate hotels under management agreements.
InterContinental currently manages Holiday Inn hotels in Ahmedabad, Jaipur, Mumbai, Manali, Khajuraho, Goa and Ooty, among other locations. The group owns, manages, leases or franchises, through various subsidiaries, more than 4,200 hotels and over 620,000 guest rooms in nearly 100 countries and territories around the world.
The $1.8-billion group operates 115 Holiday Inn hotels in China alone and has a further 1,700 properties in the development pipeline worldwide.
