Indian Hotels plans to reduce debt with sale of Taj Boston
20 May 2016
Indian Hotels Co. Ltd (IHCL), operator of Taj Hotels Resorts and Palaces, today said that it is planning to sell its Taj Boston hotel for a minimum of $125 million (Rs836 crore) in order to reduce debt and financial cost. 
This would be the company's seventh sale of its international and domestic assets in the past two years.
The company's board today approved its wholly-owned subsidiary United Overseas Holding's (UOH) to "pursue the option of divestment of the Taj Boston hotel by way of sale / disposal of the LLC interests in IHMS (Boston) LLC", Indian Hotels said in a filing with the Bombay Stock Exchange.
The board also approved a proposal to sell the hotel for not less than $125 million.
Price consideration should not be "lower than $125 million to an independent third party, subject to negotiations and execution of suitable agreements."
"The management will seek and evaluate suitable offers from prospective unrelated third-party purchasers who are interested in leveraging the Taj brand," it added.
The company plans to use the entire proceeds from the sale to retire debt.
IHCL acquired the 273-room Taj Boston (earlier known as Ritz-Carlton Boston Hotel) in 2006 for $170 million from Millennium Partners. (See: Taj Hotels Resorts and Palaces to acquire the Ritz-Carlton, Boston)
The Taj Boston is one of New England's finest hotels and a premiere social address in Boston. With 273 rooms, the hotel is located next to the famous Boston Public Garden and the city's premiere retail district.
IHCL, which has a net debt of Rs4,386 crore as of 31 March, had acquired the Taj Boston a decade ago, the hotel posted losses for three consecutive years, forcing IHCL to explore a sale.
''In recent times, the company has been relooking at all options for a course correction in strategy, focusing on growth in high-margin markets, evaluating the relevance of some of its existing assets in the portfolio to reduce leverage. In order to accomplish the above objectives, the board has authorised the management of the company to pursue such a divestment,'' IHCL said in the statement.
The Mumbai-based company had in 2014 sold its loss-making Blue Sydney Hotel in Australia for Rs180 crore, sold a part stake in Bermuda-based Belmond (formerly Orient Express Hotels) at a loss for Rs81 crore.
Its existing hotels in the US are the Campton Place hotel in San Francisco and The Pierre in New York.
