Reliance Acquires Stake in Oberoi Hotels
September 1, 2010 -Reliance Industries has acquired a stake in luxury holiday provider East India Hotels (EIH) in a deal believed to be worth US$217 million.
India's largest company, Reliance bought the 14.1 per cent stake through its wholly owned subsidiary Reliance Industries Investment & Holding. The giant conglomerate is headed by India's richest man Mukesh Ambani, while East India Hotels owns the Oberoi and Trident brands.
Reports from India suggest Mr Ambani is likely to nominate wife Nita Ambani to the board of the luxury hotel company, as part of a sharply increased public role.
The group's most famous property - The Oberoi, Mumbai - has reopened following terrorists attack on the city in 2008.The coordinated assault on India's financial capital cost 166 lives and saw more than 300 others wounded. HOtel Taj Mahal Palace reopened last month.
East India Hotels
The Reliance deal follows the sale of shares by three East India Hotels stakeholders.
A Reliance statement read: “Reliance Industry's investment in EIH has been made as the Oberoi family had developed the Oberoi Hotels brand into a premier international brand in the luxury hospitality sector and as a result EIH Limited has excellent future prospects.”
EIH swung into a quarterly net loss of US$3.3 million for the three months to June 2010, from a profit of US$4million a year earlier. Following the deal Reliance fell by 3.4 per cent - to settle at Rs915.50 - on the Bombay Stock Exchange.
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