2 weeks Ago
Samhi Hotels Ltd . on Thursday, April 24, said it has entered into a joint venture with GIC to establish an investment platform for upscale and higher hotel assets in India. GIC will acquire 35% stake in three of SAMHI's subsidiaries — Courtyard & Fairfield by Marriott, Bengaluru ORR, Hyatt Regency Pune and the recently-acquired Trinity Hotel in Whitefield, Bengaluru — against an investment of ₹752 crore.
The total enterprise value of the three subsidiaries is ₹2,200 crore. Of the ₹752 crore, ₹603 crore upfront will be used to reduce the debt across Samhi's portfolio and a small amount towards deal expenses. The remaining ₹149 crore will be used over the next two years to part-fund the capital expenditure for the Westin / Tribute portfolio Bengaluru Whitefield dual branded hotel.
To simplify, the primary investment is for debt repayment and capital expenditure across all three subsidiaries and the secondary investment is to acquire shares in Samhi JV hotels from Samhi - these funds will further reduce debt across other Samhi entities. The company said the transaction follows its strategy of capital recycling and will lead to significant reduction in debt and partnership with a global investor of GIC's stature for funding growth. Upon closure of this transaction, Samhi Hotels expects a ₹580 crore reduction in debt and upward impact between 15% to 20% to its profit after tax (PAT) on account of the transaction.
The net debt-to-EBTIDA at closing was less than 3.5x. Samhi Hotels is looking at an accelerated path to less than 3x in the next 12 months without compromising on growth.
Future cashflows will get a significant boost due to reduction in debt and part funding of Westin / Tribute portfolio Bengaluru Whitefield capital expenditure by GIC, the company said. Shares of Samhi Hotels ended the previous session 1.33% lower at ₹173.
86 apiece. The stock has gained 14.7% in the past month.
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