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Pride lines up overseas acquisition

The Mumbai-based Pride Group of Hotels is eyeing to go international. The promoters have identified a hotel in London and are in the due diligence stage to acquire it.

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MUMBAI: The Mumbai-based Pride Group of Hotels is eyeing to go international. The promoters have identified a hotel in London and are in the due diligence stage to acquire it.

S P Jain, managing director, Pride Group of Hotels, said the 140-room standalone hotel is located somewhere around Kennington in central London. “We will know the final status on the acquisition once the due diligence is done,” he added.

Jain expects this acquisition to cost the company over Rs 115 crore. “This will include renovation expenditure as well.”

The acquisition will be funded through a mix of internal accruals, debt and some part of it will be from the Rs 45-crore private equity funding received from Kotak India Real Estate Fund in October last year.

Pride Group is also looking at establishing a presence in the Middle East. It is understood to be in talks with a Dubai-based company to manage their serviced apartments. “It is still in the initial stages,” said Jain.

The management contract will mark Pride’s entry into the serviced apartment category.
When asked if the company will set up serviced apartments in India, Jain said the concept is nascent in the country and will take sometime to mature.

The overall expansion and renovation will cost Pride Group Rs 750 crore. According to company promoters, the amount would be raised through internal sources and term loans. The hotel chain has postponed its initial public offering plans. The promoters may look at another round of fund raising from financial institutions/private equity firms late 2009 or when there is a requirement.

The promoters are going steady with establishing the hotel’s presence in Bangalore and Jaipur. “The Bangalore hotel will be owned five-star property featuring 100-keys, while Jaipur will be a management contract for 50-room Pride Biznotel,” said Jain. These properties will get operational by this year.

Currently, three five-star properties in Alibaug, Goa and Mumbai are in planning stage and negotiations are on in Kerala, Andhra Pradesh and Gujarat. The company expects to add 3-5 Pride Biznotels and three Pride Resorts to the current portfolio by this year.
Taking the management route aggressively new Biznotels are expected to come up in Nashik, Mysore, Indore, Coimbatore, Raipur, Madurai and Goa.

Pride Group’s current portfolio comprises five-star hotels in Pune, Ahmedabad, Nagpur and the recently opened Chennai hotel. Besides its owned five-star hotel under construction in Mumbai, negotiations are also on for acquiring another hotel in Mumbai and a few in Delhi.
t_ashish@dnaindia.net

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