The Indian Hotels Company (IHCL) said on Tuesday it had signed a binding agreement for the acquisition of the balance 14.28% equity interest in ELEL Hotels and Investments Limited (ELEL) from the Nanda family, which will make IHCL, the 100% leasehold owner of the Sea Rock hotel site by December 31, 2021.
“The visionary redevelopment of Sea Rock promises to be not only another defining landmark in India’s commercial capital of Mumbai but also an opportunity to build an iconic sea front hotel in South Asia,” said Puneet Chhatwal, managing director and CEO of IHCL.
In November 2019 IHCL’s board of directors had approved the terms for the settlement to acquire the 14.28% shareholding. The payment will be structured through multiple installments staggered over a period, with a full buyout by December 31, 2021, IHCL said and added that the settlement will ensure 100% control of the shareholding.
IHCL’s plans to rebuild the hotel site have been stuck after the National Green Tribunal (NGT) stayed clearances given to it last year citing violation of Coastal Zone Regulations (CRZ).
In 2009, IHCLhad announced the acquisition of the defunct Sea Rock Hotel for Rs 680 crore by acquiring an 85.72% stake in owner ELEL. At the time, IHCL had said it planned to build a hospitality cum convention complex on the hotel site and integrate it with the nearby Taj Land’s End.
The acquisition had also figured in the Cyrus Mistry Tata boardroom battle with Mistry alleging the deal had eroded nearly the entire net worth of IHCL for three years.
Cyrus Mistry, in his letter to the Tata Sons board in 2016 had said: “IHCL, beyond its flawed international strategy, had acquired the Sea Rock property at a highly inflated price and housed in an off-balance sheet structure. In the process of unravelling this legacy, IHCL has had to write down nearly its entire net worth over the past three years. This impairs its ability to pay dividends.”
