Mumbai, Oct 11: No restrictions have been levied on foreign hotel chains or companies to make their bids in the Hotel Corporation of India (HCI) disinvestment process. Foreign hotel chains can come through the 51 per cent automatic approval route from the Foreign Investment Promotion Board (FIPB) and enter the bidding route, an Jardine Fleming official said. However, it will be at the discretion of the global advisors and other decision makers to consider or reject the proposal, he clarified. Expression of Interest (EOI) for sale of its entire equity of the Hotel Corporation of India (HCI) comes in wake of the government's decision to privatise Air-India and its subsidiaries.The disinvestment of HCI would also simplify and enable Air-India, its holding company, to fetch a better price. HCI owns the Centaur chain of hotels, two in Mumbai and one each in Delhi Srinagar and Rajgir, Bihar. It also owns two flight kitchen one each in Mumbai and Delhi. The flight kitchen in Delhi is to be sold off as a package with the hotel in Delhi.
According to analysts, the disinvestment has been well timed particularly in light of the improvement in fortunes of the hotel industry as also the foreign hotel chains which are closely watching the hotel scenario in India. The HCI disinvestment might just be the stepping stone for these chains to establish themselves in India, say analysts. According to an investment banker, foreign chains though interested are already setting up shops in India particularly in Mumbai and Delhi. But HCI's properties will continue to be at a premium in the two metro cities among others.
On flight kitchens, analysts said it is unlikely that any airline might bid to acquire it since it is cheaper to set up a flight kitchen. When asked whether the entire process will be completed by December 31, 2000, an official at Jardine Fleming said that our job is to get the best price irrespective of the deadline.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.