London-listed hospitality and leisure company, India Hospitality Corp (IHC) will now be managing 10 hotels of the realty firm Entertainment World Developers (EWDPL), by investing a huge amount of Rs. 100 crore. EWDPL will be developing these 10 properties across the country and lease them to IHC for a period of 30 years. The company, in a statement dated November 3, 2009, said that these properties would be managed by its wholly-owned hotel subsidiary Gordon House Estates.
Sandeep Vyas, IHC President and COO, said that EWDPL would put in Rs 150 crore to make the hotels operational by 2011 and then, IHC would put in Rs 100 crore to manage these properties. He added that Rs. 100 crore would be raised through equity, internal accruals and bank borrowings. He also spelt out the expectation of a topline of Rs 70 crore in the first year of operation, after the hotels become operational by 2011-12. He did not disclose any other details about the agreement.
Manish Kalani, EWDPL Managing Director, said that IHC's experience of operating in the hospitality sector, coupled with their understanding of the tier-II market opportunities, was a win-win situation for both of them. As part of the agreement, IHC will acquire Treasure Food & Beverage, the franchisee for Pizza Hut in central India, from EWDPL. The transfer depends on consent from YUM brand, which owns Pizza Hut brand. The 10 hotels, together having 352 hotel rooms, will come up in Nanded, Ujjain, Jabalpur, Bhilai and Raipur.