Tata Group’s hospitality firm Indian Hotels Company today said its subsidiary Roots Corporation will sell a minority stake to the Singapore based Omega TC Holdings for Rs 150 crore.
“Roots Corporation Ltd, a wholly owned unlisted subsidiary of the company, has approved the investment by Omega TC Holdings Pte Ltd... for Rs 150 crore in various tranches for acquiring an equity stake in the company (Roots),” Indian Hotels said in a filing to the Bombay Stock Exchange (BSE).
Additionally, Omega TC Holdings will be acquiring Compulsorily Convertible Preference Shares (CCPS) from some existing holders for an aggregate consideration of Rs 70 crore, the company said.
The CCPS along with the aforementioned equity shares will give Omega a minority stake (on a fully diluted basis) in Roots Corporation, it added.
“In addition, the investor will also have an option to invest a further Rs 100 crore into Roots Corporation by March 2014, subject to satisfaction of certain conditions,” the filing said.
A Tata Group company, Roots Corporation was established in 2003 and operates the Ginger chain of budget hotels across India.
The Board of Directors of the company have approved the execution of a share subscription agreement, a shareholders agreement and other incidental documents which contain terms customary for a transaction of this nature, it added.
Indian Hotels scrips were trading at Rs 77.85 per share on the BSE today, down 0.70 per cent from the previous close.