Indian Hotels acquired the 10% stake in Orient-Express Hotels, through its wholly owned subsidiary Samsara Properties, which is registered in the British Virgin Islands. Purchase price made $211.28 million (Rs 857 crore).
The BVI-incorporated Samsara purchased almost 4.25 million shares between August 17 and September 14 from the market. It was done after the company received a loan of $300 million from London-based Tata Ltd., which carries an annual interest rate of 6.25%. On August 20, Samsara drew $135 million under the terms of the loan agreement; the amount of another $100 million was drawn by the company on September 11, and later a final sum of $65 million.
Now IHC want to discuss forming an alliance with Orient-Express Hotels that would probably include combination of the international properties of the two companies. In a filing with the SEC, it said it had delivered a letter last Friday to James B. Hurlock, chairman of Orient-Express Hotels. After the proposed dialogue with Orient-Express, IHC and Samsara would review their ivestment in the company on a regular basis. Then, the company would decide whether to acquire additional shares in the company or dispose of all or a part of the shares is has bought.
By words of IHC vice-chairman R.K. Krishna Kumar, “The possible combination of the two brands will create a powerful competitive advantage.â€