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Dawnay, Day’s Lamba hikes stake in firm

Mandeep S Lamba, founder and managing director of Dawnay, Day Hotels’ (DDH) India operations has enhanced his stake in the hotel management firm now owned by Duet India Hotels.

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Mandeep S Lamba, founder and managing director of Dawnay, Day Hotels’ (DDH) India operations has enhanced his stake in the hotel management firm now owned by Duet India Hotels.

Industry sources said Lamba, along with management team, earlier held 15% in the hotel management company, which has now been doubled to 30%. The balance 70% is owned by Duet.

Duet recently acquired DDH in a deal worth close to Rs 200 crore. Lamba said Duet has bought all DDH hotels while the management company continues as a joint venture.
Lamba said, “While Alok Vajpeyi’s (vice-chairman and managing director of erstwhile Dawnay Day AV Financial Services) minority interest in the management company has been fully acquired by Duet, I have now enhanced stake in the JV.”

However, he was not willing to comment on the precise ratios.

Lamba said, “The JV entity will look at managing third-party hotels under the Ten Hotels brand.” While DDH still exists as an entity it will eventually be merged under Duet India Hotels.

The DDH’s Indian hotels business was owned by the Dawnay Day Group through its investment companies, Starlight Investments and Insure-profit. A 10% stake was held by Vajpeyi and Lamba.

Lamba said, “Around 500 rooms between the hotels under development at Ahmedabad, Pune and Jaipur, along with the management company, were offered as part of the deal. I won’t be able to share valuation related information as we are bound by a non-disclosure agreement.”

Industry sources said the Duet deal took time to be sealed owing to valuation related problems. But, Lamba said the delay was owing to the off-shore nature of the investment.

“The Indian assets (DDH) are held by individual Indian companies, which in turn are held by Mauritian companies, held by a Luxembourg firm, which is finally held by the UK-based Dawnay Day Group,” he said.

“The UK-based firm had become insolvent and a receiver had been appointed with whom the deal had to be done. It was important to ensure proper legal title of the shares that were being sold, which was complex owing to the structure of the shareholding,” he added.

On the post acquisition status of the hotel company, the projects team that was looking after the development of Ten Hotels is understood to have moved to the fund owning company, Duet India Hotels. The team will be responsible for ensuring the completion of the three assets acquired besides several others in the pipeline. 

Lamba said, “The Ten Hotels brand is owned by the management company and this will continue to be built. Duet has the option of either retaining or looking at alternate brands for the three hotels that have been acquired.”

Duet India Hotels Ltd (DIHL) is a real estate specific private equity fund from the UK-based Duet Group. With a corpus of $166.5 million, DIHL will focus on commercial integrated business hotel development in India. The firm plans to build a significant portfolio of 5,000 rooms in the mid-priced hotels category over the next 5-7 years.

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