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Indian Hotels Company (IHCL), owner of the Taj Mahal chain of hotels, is aiming to cut high cost debt by ₹550 crore by utilising a part of the proceeds from its upcoming rights issue.
IHCL is to issue compulsorily convertible debentures (CCDs) for ₹1,000 crore on a rights basis. Part of the proceeds would be utilised towards capital expenditure proposed to be incurred by the company for construction of its Vivanta by Taj in Guwahati.
The company intends to utilise ₹70 crore towards the upcoming property. The estimated cost of construction and commissioning of the Vivanta Guwahati stands at ₹166.80 crore, of which the company has already incurred capex of ₹68.18 crore till March 31, 2014.
“The company intends to use ₹552.68 crore from the net proceeds towards full or partial repayment or pre-payment of certain borrowings availed by the company, including redemption premium on non-convertible debentures,” the company said in its letter of offer.
IHCL has some 125 hotels that it operates or manages.
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