Orient Express write-off has IHCL in net loss of Rs 339 crore

IHCL is the second Tata Group firm to write down on foreign acquisitions

Written by Press Trust Of India | Mumbai | Published: May 31, 2013 3:23 am

Indian Hotels Company Ltd,which runs the Taj and Ginger brand of hotels,today reported net loss of Rs 339 crore for the quarter ended March 31,impacted by provisions worth Rs 423.66 crore for its investment in Orient-Express Hotels.

IHCL has reported an exceptional expenditure of Rs 424 crore on account of provisioning of its investments in the US-based Orient Express and BJets aggregating to Rs 401 crore as well as Rs 23 crore expenditure incurred towards satisfactory settlement of an arbitration claim.

IHCL is the second Tata Group firm to write down on foreign acquisitions,after Tata Steel earlier this month announced USD 1.6 billion goodwill write-down as the value of its USD 12-billion Corus buyout has come down massively,impacting overall performance.

About a decade ago,the Tatas had picked up 10 per cent stake in Orient Express for USD 261 million,paying a hefty premium from the open market. But the Tatas had brought down their stake in the Bermuda-headquartered group that owns and operates 50 luxury hotels,trains,cruises and restaurants worldwide.

Similarly,the company said it has an offshore subsidiary called Taj Hong Kong,through which it holds many investments,including that in Orient as well as other assets in London,the Maldives and Sri Lanka,among others.

“We have looked at the value of our investment in the subsidiary and relooked at the valuation of the underlying portfolio to see what is the upside or downside that we need to recognise. Based on our calculation,we felt we need to recognise Rs 305 crore,” the company’s executive director for finance,Anil P Goel,told reporters here late this evening

For all the latest News Archive News, download Indian Express App

    Live Cricket Scores & Results