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Indian Hotels signs US$ 600 million investment partnership with Singapore's GIC

Livemint:  May 17, 2019

Bengaluru: Tata-group owned Indian Hotels Co Ltd (IHCL), which runs the Taj luxury hotel chain, on Friday signed a strategic partnership with Singapore’s sovereign wealth fund GIC Pte Ltd for an investment framework of around ₹4,000 crore ($600 million) for a period of three years. This investment platform will be used to acquire fully operational hotels mainly in the luxury, upper upscale and upscale segments in India, IHCL said in a BSE filing.

The platform allows IHCL to pursue acquisitions in an asset-light format, with the equity contribution from IHCL at 30% and the balance contributed by GIC, over a period of three years. The acquisitions are intended to be housed in a separate special purpose vehicle (SPV) with its own funding.

The hotels acquired within the framework will be managed by IHCL under its marquee brands.

This investment framework will complement IHCL's current growth aspirations via management contracts, the company said.

In February, 2018, IHCL had outlined a development strategy "Aspiration 2022" to drive its inventory growth. Through this strategy, the company aspires to create greater enterprise value and make IHCL south Asia's most profitable hospitality company.

GIC is a sovereign wealth fund established by the Government of Singapore in 1981 to manage Singapore's foreign reserves. It is a global long-term investor with well over $100 billion in assets in over 40 countries.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.