US hospitality group acquires 26 per cent in JV with Unitech

New Delhi: US hospitality group Carlson will acquire a 26 per cent stake in a fresh venture with the Unitech Group for introducing the Regent hospitality brand in India. Carlson will acquire the stake with a nominal investment of Rs2.6 crore in the paid-up capital of the joint venture company - Elbrus Builders. This amount will be used for the working capital of the project. Currently, the Unitech Group companies hold 100 per cent stake, including 34 per cent equity holding through Unitech Hospitality, a wholly owned subsidiary of the group's listed arm, Unitech Ltd.

Elbrus, in the past, had an approval from the Noida Authority to develop a five-star hotel project in the city. The joint venture would develop the luxury hotel property located at Greater Noida with an estimated investment of Rs450 crore.

Carlson has global operations under brands like Radisson, Park Plaza, Park Inn, Country Inns & Suites et cetera. Apart from Regent, this would be the first such equity venture in the country.

Carlson would receive a one-time total initial fee of $100,000, a base management fee of 2.2 per cent of the hotel's turnover, incentive management fee of 7 per cent of the hotel's gross operating profit and marketing contribution of 1.5 per cent of hotel's total revenue. This apart, it would get 1 per cent of hotel's gross room revenue as reservation charges and $8,000 per month plus reimbursement expenses for hotel development services fee in addition to third-party reservation charges.