BUSINESS

RIL buys 14.12% in EIH for Rs 1,021 cr

Source:PTI
August 30, 2010 17:11 IST

Mukesh Ambani-led Reliance Industries said on Monday it has acquired 14.12 per cent stake in EIH, that runs the Oberoi brand of hotels and resorts, for Rs 1,021 crore (Rs 10.21 billion).

The purchase is through RIL's wholly-owned subsidiary Reliance Industries Investment and Holding Private Limited, from Oberoi Hotels Private Limited and certain other promoters of EIH Limited, RIL said in a statement.

"RIL's investment in EIH Limited has been made as the Oberoi family had developed the 'Oberoi Hotels' brand into a premier international brand in the luxury hospitality sector and as a result EIH Limited has excellent future prospects," the statement said.

RIL has full faith in and would support the management of EIH Limited and there is no change of management, operation or control of EIH Limited, it added.

Commenting on the stake sell, Oberoi Group chairman PRS Oberoi said: "RIL desired to make a long term financial investment in the luxury hospitality industry. We are happy to encourage their investment in EIH Ltd. There is no change to control, management or operation of EIH."

The development comes less than two months after Oberoi ruled out selling promoter stake in EIH Ltd, although he said he could not stop rival ITC from buying shares in the open market.

Earlier this year, ITC Ltd had increased its stake to 14.98 per cent in EIH Ltd triggering speculation that the FMCG-to-hospitality conglomerate could go for an open offer once it crosses the 15 per cent mark.

"We have 46.4 per cent (in EIH Ltd) and there is no plan to sell any stake," Oberoi had said in July.

Asked about ITC increasing stake in EIH through open market purchases, he said: "If somebody wants, we can't stop people buying from the stock market."

EIH shares jumped 11.46 per cent on the Bombay Stock Exchange to touch Rs 150.70 per share in the afternoon trade.

Source: PTI
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