Taj Mahal’s palace wing to re-open in July

The iconic palace wing of Taj Mahal Palace & Tower, Mumbai, is readying to receive guests all over again.

The 287-room flagship of the Tata Group promoted Indian Hotels Co Ltd (IHCL) has been undergoing renovation after being damaged in November 2008 terror attacks.

“The renovation work is nearing completion and the hotel should be completely operational early July,” Raymond N Bickson, managing director, IHCL, told DNA.

Anil P Goel, executive director - finance at IHCL, said the company would make the details of the hotel’s renovation costs public closer to the opening date.

The company has received Rs 180 crore from the insurance company towards an ‘on account’ payment covering the claims towards business interruption and property damage.

“We have satisfactorily completed all the formalities related to the survey and expect the balance payments due to us to be closed amicably in the next few months once we reopen the hotel and submit all the documents including bills, etc,” Goel said.

For 2009-10, IHCL reported a turnover of Rs 1,566.35 crore and a profit after tax of Rs 153.1 crore registering a decline of 8% and 35%, respectively over 2008-09. On a consolidated basis, the turnover in the last fiscal stood at Rs 2606.18 crore, down 5% from the previous fiscal.  The consolidated loss for the last fiscal stood at Rs 136.88 crore as against a net profit of Rs 12.46 crore in fiscal 2009.

During the fiscal 2010, IHCL raised Rs 700 crore through low-coupon, non-convertible debentures to retire foreign currency debt in some of its offshore wholly owned subsidiaries.

“The overall debt in the aggregate has been more or less the same but by reshuffling and changing the mix between rupee and foreign currency debt, by moving short-term debt into long term we have been able to bring down the effective debt cost at a consolidated level of around 7%,” Goel said.

“We have also restructured some of our investments to fund our greenfield projects for the next 17-18 months without any need to raise more debt.”

Owing to significant changes in the pattern of corporate movement, the international hotels (particularly in the US) haven’t been able to get the desirable cash flow.

“The challenge and the single-largest mission before IHCL is improving cash flow of the US assets. The Pierre in New York got online in September 2009 after a $100 million renovation. The product has taken its time since to reconnect with its customer base. We are gradually getting to where we want the product to be,” said Ajoy K Misra, senior vice president - sales and marketing for IHCL.

IHCL will add 1,647 rooms globally (owned and managed) during the current fiscal. The additions will increase the room inventory by 13%.