INDIA BUSINESS WORLD - JUNE 2006
THE MONTH THAT WAS...

SURI TO ACQUIRE BALAJI'S 7-STAR FOR RS 390 CRORE

  HOTELIER and Rajya Sabha MP Lalit Suri's Bharat Hotels is set to make a 'grand' entry into Chennai's thriving hospitality market.

Mr Suri's group is picking up the yet-to-be completed 320-room seven star hotel property of Balaji Hotels and Enterprises in the city for an estimated Rs 385-390 crore. In addition to the rooms and other facilities, the project includes a 2.5 lakh sq.ft. of commercial space, with a separate entry and exit routes.

"The settlement consideration includes the liabilities to be paid to the institutions like IFCI, TFCI and ICICI, NBFCs and contractors among others,". The promoters of the hotel have initiated discussions with the institutions for arriving at an 'one time settlement', the sources added.

The liabilities include about Rs 160 crore due to IFCI and close to Rs 50 crore to be paid to ICICI. In addition, dues were pending to the contractors and NBFCs. Mr Lalit Suri, CMD, Bharat Hotels confirmed that his group is close to clinching the property from the Balaji Group. He, however, declined to comment on the ‘agreed amount' to be paid to the promoters. “It all depends on how much the institutions agree to settle for,” Mr Suri, even while adding that a clear picture should emerge within the next week.

Mr Suri is the single largest hotel owner with complete majority in his properties. These include the flagship, InterContinental The Grand in Delhi and six other Grand hotels in Mumbai, Goa, Bangalore, Srinagar, Udaipur and Kajuraho, adding up to around 1,600 rooms.

Launched over a decade ago, Balaji's hotel property was initially known as 'Magunta Oberoi'. It was proposed to be Chennai's first seven-star hotel, complete with an helipad.However, with the Balaji Group getting entangled in a financial crisis soon after, the project could not be completed on time. Consequently, the Oberois walked out of the project in 2000.