Indian Hotels Limited, a Tata group hotel major, is all set to undergo a restructuring with some of its assets being transferred to Ajit Kerkar, its outgoing managing director. The proposed arrangement would be part of a compromise deal between him and Bombay House, the seat of the Tata empire.
A leading investment banker has been appointed to advise the restructuring of the company business, sources said.
To tide over any controversy in the wake of Kerkars departure, certain newer assets of Indian Hotels could be transferred to Ajit Kerkar in return for Indian Hotels accepting the Tata brand equity programme. Sources said a preliminary deal to this effect has been reached. Under the Tata brand equity programme, Tata companies are to contribute a specified amount to Tata Sons to enable the latter to promote the Tata brand in domestic as well as world markets. In return, the Tata name would be incorporated in the Taj logo.
Besides, the Kerkar-owned travel and tourism company, Cox & Kings, is also expected to have a bigger role in the post-restructuring scenario, the source said.
Currently, Cox & Kings mans the entire tourism desk of all the Taj group hotels, both in India and abroad. Ajit Kerkar is currently in London and could not be reached for his comments. Significantly, Cox & Kings CEO Peter Kerkar too is in London currently.
One gets to hear a lot of things, however, no major change in the existing structure can be done without the board knowing about it, if any major properties are transferred then the board would have known, a Tata source said.
The Indian Hotels board is to meet on June 12 to decide on the issue of Kerkars succession. Kerkar is expected to have a big say in the nomination of his successor, sources said.
