Tata Group hospitality major Indian Hotels Company, which runs Taj Group of hotels, has completed sale of Taj Boston hotel for USD 125 million (about Rs 839 crore) and will use the proceeds mainly to pare debt.
"United Overseas Holdings effected on July 12 the divestment of Taj Boston Hotel through sale of the entire issued and outstanding LLC interests of IHMS (Boston) LLC held by UOH to AS Holding LLC, Boston for an aggregate consideration of USD 125 million," Indian Hotels Company Ltd (IHCL) said in a regulatory filing. Net sale proceeds will be utilised largely to retire outstanding debt, it added. United Overseas Holdings (UOH) is an indirect wholly owned subsidiary of IHCL and IHMS (Boston) LLC is a direct subsidiary of UOH, the filing said.
Taj Hotels Resorts and Palaces will continue to manage the 273 key hotels under a long-term management services agreement with the owning company, the company said in a statement. Taj Hotels Resorts and Palaces MD and CEO Rakesh Sarna said the sale was in line with Taj's global business strategy.
"The US remains an important market for us and we are committed to our presence which we have built over the past decade in key cities like New York, San Francisco and Boston," he added. "We are thrilled to join with Eastern Real Estate, Rockpoint, Lubert-Adler and Highgate in acquiring this legendary hotel property - located in one of the country's most famous shopping districts," New England Development Chairman Stephen R Karp said.
IHCL had acquired Taj Boston Hotel in 2006, recognising the importance of presence of brand Taj in the US, which is the single largest source market for the company. However, global economic recession impacted fortunes of the hospitality sector around the world and its profitability as well.
Taj Boston's total revenue in 2015-16 dipped 1.15 per cent to USD 34.1 million from USD 34.5 million in 2014-15. In May this year, IHCL said its board had authorised the present management of the company for sale of Taj Boston.
Established in 1902, Taj Hotels Resorts and Palaces has 100 hotels in 63 locations across the globe, including in India, North America, the United Kingdom, Africa, the Middle East, Malaysia, Sri Lanka, Maldives, Bhutan and Nepal.