The Taj Group of Hotels

The Indian Hotels Company today announced that it had acquired the Regent Hotel, in Bandra, Mumbai and had taken over operations yesterday i.e. September 10 - Shri Ganesh Chathurthi day. The Hotel has been renamed Taj Lands End, Mumbai.

The Taj acquired 19.9% equity interest in Lokhandwala Hotels Private Limited (LHL) (name to be shortly changed) for a consideration of Rs.24 crores, whilst the balance 80.1% has been acquired by ICICI Trustee Services Limited (I-Ventures) for a consideration of Rs.95 crores. LHL, (soon to be renamed) will function as a holding company for the foreseeable future. The Taj can acquire the balance equity in one or more tranches in accordance with the terms of the Agreement drawn up with I-Ventures. The Indian Hotels Company Limited will operate the hotel under a license agreement.

The consortium of lenders to LHL, lead by ICICI, IDBI etc, have re-structured their loan package to the new entity. The effective total cost of the acquisition is Rs.415 Crores or Rs.80 Lakh per room, which is 40% less than the replacement cost of an equivalent property.

Taj Lands End is built on 9.25 acres of land at the tip of Bandra's Bandstand. The hotel was built as a 508 room 5-star deluxe property. It is currently operating 300 rooms. The Taj will re-structure the top four floors of the property into world-class serviced apartments. All the rooms of the hotel have breath-taking views of the Arabian Sea.

The Hotel enjoys a splendid and unique location. It is about 25 minutes away from the airports, with the new flyovers in place, and yet not in the cluster of buildings in the vicinity of the two airports. With the commissioning of the Worli-Bandra Sea Link, which is making rapid progress, Taj Lands End, will cater to the emerging Worli market as well. It will eventually be almost 45 minutes away from the Central Business District of South Mumbai, when the link road project is completed, giving the property a strategic advantage. The Taj proposes to introduce new Food and Beverage outlets, new business and entertainment facilities, a new retail complex, besides Serviced Apartments all of which is aimed at making the Taj Lands End India's first world-class mixed-use luxury complex.

The North Mumbai market continues to witness a surge in room demand over the last three years, despite significant increase in the room supply over the same period. Even in a year 2001-02, North Mumbai demand for hotel rooms grew at 15%. The Taj anticipates that despite all the new hotels that have come up in North Mumbai, including those that are expected to be commissioned in the near future over the next 3 years, demand will continue to surge strongly in the area with the emergence of new customer segments.

Announcing the move, Mr. R. K. Krishna Kumar, Managing Director, Indian Hotels Company Limited said, "We have been targeting an acquisition in North Mumbai for sometime to complete our segment presence in India's commercial capital. In addition, the Taj Lands End, gives the Taj's Mumbai properties strategic flexibility and market reach, which presently no other hotel enjoys in Mumbai. We have done this without adding new room supply in North Mumbai. Additionally, it will enable us to divest ownership of large tracts of land in North Mumbai, which have been acquired in the past for building a hotel. We are excited by this opportunity to penetrate North Mumbai with a world-class property and the legendary hospitality standards of the Taj."

Meghna Patel
(212) 696-0660
IHCL