Jamshedpur 8 Aug 2019: Indian leading hotel brand Tata’s Taj is to sell assets to trim debt.
The luxury hotel chain is looking to sell some assets and avoid owning new properties in an effort to further pare debt, as it braces for a slump in consumer spending.
Puneet Chhatwal, managing director and the chief executive officer said in an interview that Indian Hotels Co., Tata’s listed firm that operates the Taj brand, plans to dispose of certain budget inns in the nation’s non-metro areas and lease them back for a fee.
The Mumbai-based company’s measures to cut costs and liabilities come at a time growth in India’s economy has cooled to a five-year low, while a lingering shadow-bank crisis damps discretionary spending. The nation’s biggest carmaker, Maruti Suzuki India Ltd., reported the worst sales drop since 2012 in July. Besides the slowdown, the grounding of Jet Airways India Ltd. has also hit Indian Hotels, forcing it to write-off some dues.
The hotel operator aims to reduce ownership of properties to 50% by 2022, from 70% at present, Chhatwal said. The sale and lease-back plans include as many as six hotels at the group’s Ginger budget brand and a similar number held by joint ventures and associate companies, he said.