Lazard Trust International, a Channel Island-based company of the Lazard group, has offered to pick up 24.5 per cent equity stake in Ramani Hotels Ltd, an investment company which is a 50:50 joint venture between the Mahindra group and Sinagpre based Accor Asia Pte, part of the Australia-based Accor Asia Pacific (AAPC Asia).
The Mahindra-Accor joint venture , Ramani Hotels, will ste up , develop and invest in new hotels and the three eixsting properties promoted by ramani Hotels at bangalore, tirupati and Mumbai, which will be rebranded with a Accor brand of mid-segment hotel, Mercure Inn Guestline.
As part of the gameplan being worked out, Mahindra group and AAPC will divest to hold 52per cent controlling stake equally between the two. Out of the rest , 48per cent, Lazard Trust International has offered to pick up 24.5 per cent stake in the hotel investment company for a sum of $ 7,000,000.
As part of the strategic tie up between the two giants, Accor and Mahindra are also setting up a management company to manage the joint venture hotels and other properties.
In this joint venture company Accor Asia will hold 74 per cent stake, while the Mahindra Holdings and Finance Ltd will directly have 10 per cent stake with the rest of 16% to be held by the joint venture investment company.
Accor has also agreed to pay $ 7.9 million to acquire 1,38,810 shares of par value rs 100 each ---- amounting to 50 per cent ---- of Ramani Hotels from the existing shareholders.
This joint venture has ambitious plans for growth and expects to add approximately 15 hotels over the next five years .
Accor Asia Pacific is the largest hotel group in Asia-pacific region with 124 hotels in 15 countries.
The major shareholder is Paris-based Accor SA, the largest hotel operator in the world.
The other brands operated by Accor Asia include Ibis, Sofitel, Novotel and Formule 1.
Since the hotel management joint venture between Accor asia and the mahindra group will be service company, the capital requirements will be nominal, $ 1,000. The management company will anage and operate hotels and serviced apartments in India and neighbouring countries under various Accor Asia brand names.
For this the management company will receive from the hotels fees ranging from 2.5 to 3 per cent of the gross total revenues of the hotels and 6.5 to 10 % of the gross operating profits of the hotels in rupees.
According to sources in the foreign investment promotion board, where ACC or has applied for government approval for the two joint ventures with the Mahindra group, in consideration for the transfer of technology by Accor Asia to the hotel management , the latter shall pay ACCor Asia out of the fees charged by it from various hotels 2 per cent of the gross room revenue and 0.25 per cent of the gross total revenues of the hotels managed by the joint venture company.
