Key Transaction Details

Parties Involved: The Scheme of Arrangement is between Oriental Hotels Limited (OHL) and The Indian Hotels Company Limited (IHCL) and their respective shareholders.

Transaction Type: Amalgamation of OHL into and with IHCL.

Share Exchange Ratio: The Scheme proposes an exchange ratio of 25 IHCL shares for every 117 OHL shares.

Transaction Structure: The transaction is an all-stock transaction.

Appointed Date: The Appointed Date for the Scheme is April 1, 2027.

Target Completion: Completion is targeted in the second half of FY2028.

Approval Status: The Scheme is subject to statutory approvals and clearances.

Rationale and Strategic Purpose

From IHCL (Puneet Chhatwal, MD & CEO):

  • The merger is in line with IHCL's 'Accelerate 2030' strategy.
  • Aims to create value, simplify the group's holding structure, and unlock the full potential of OHL's portfolio, including iconic assets like Taj Coromandel (Chennai), Taj Fisherman's Cove Resort & Spa (Chennai), and Taj Malabar Resort & Spa (Cochin).
  • The merger will leverage IHCL's strong balance sheet to support strategic investments in inventory expansion and product enhancements for the OHL portfolio.

From OHL (Pramod Ranjan, MD & CEO):

  • The merger will enable OHL shareholders to participate directly in IHCL's growth journey, citing IHCL's seventeen consecutive quarters of record performance, fourfold portfolio growth, sustained double-digit increases in revenue and profitability, and strong return on capital employed.

From IHCL (Ankur Dalwani, EVP & CFO):

  • The merger will simplify the group's holding structure by increasing IHCL's direct ownership across several entities, resulting in two new operating subsidiaries.
  • This is expected to streamline governance, optimise overheads, enhance operational efficiency, and support the 'Accelerate 2030' objectives.

Portfolio and Corporate Structure Details

OHL's Current Portfolio: Oriental Hotels Limited is an associate company of IHCL with a portfolio of seven hotels comprising 825 rooms.

  • Freehold Assets: Taj Coromandel (Chennai), Taj Fisherman's Cove Resort & Spa (Chennai), Gateway (Coonoor).
  • Long Tenure Leasehold Assets: Taj Malabar Resort & Spa (Cochin), Vivanta (Coimbatore), Vivanta (Mangalore), Gateway (Madurai).

OHL's Strategic Investments: OHL has strategic investments in several IHCL group hotel companies, including St. James Court, TAL Hotels and Resorts Ltd, Lanka Island Resorts Ltd, Taj Madurai Ltd, and Taj Karnataka Hotels and Resorts Ltd.

Transaction Advisors

For IHCL:

  • Registered Valuer: PwC Business Consulting Services LLP (undertook valuation and recommended share exchange ratio).
  • Fairness Opinion: Kotak Mahindra Capital Company Limited.
  • Legal Counsel: Cyril Amarchand Mangaldas.

For OHL:

  • Registered Valuer: SSPA & Co., Chartered Accountants (undertook valuation and recommended share exchange ratio).
  • Fairness Opinion: Motilal Oswal Investment Advisors Limited.
  • Legal Counsel: Kochhar & Co.

Filing Details

Company Address: Taj Coromandel, No. 37, Mahatma Gandhi Road, Nungambakkam, Chennai - 600034.