Nitesh Estates plans to raise Rs 1kcr via SPV share sale

Nitesh Estates plans to raise Rs 1kcr via SPV share sale
The Economic Times, November 18, 2009, Page 7

Proceeds To Finance Setting Up Of Ritz Carlton Hotel In Chennai

Boby Kurian & Sachin Dave BANGALORE MUMBAI

BANGALORE-BASED real estate developer Nitesh Estates is learnt to have planned to raise nearly Rs 1,000 crore through sale of shares of a special purpose vehicle (SPV) to finance setting up Ritz Carlton hotel in Chennai.

A person close to the matter said the hotel SPV would sell shares to private equity investors prior to its listing with a foreign stock exchange, preferably Singapore or London. Nitesh would dilute over 70% stake through stake sale and foreign listing, he added. Executive director LS Vaidyanathan refused to comment on the issue.

Last week, Nitesh entered into an agreement with US-based Ritz Carlton, a whollyowned subsidiary of Marriott International, to set up a 200-room hotel and 80 serviced residences in Chennai. The project, which will be located on 9 acres of land in Chennai’s posh Boat Club area, will also have one lakh sq ft of luxury retail space. The cost of the project is estimated to be around 1500 crore. Nitesh is also working with the foreign company to develop a hotel in Bangalore in next two years.

Daiwa Securities and Nomura are learnt to be in discussions with Nitesh Estates for the overseas listing of the SPV in next six months. Nitesh Estates is expected to hit the market with a Rs 550 crore initial public offer (IPO) in January. It has learnt to have appointed Morgan Stanley, Enam, Kotak and JM Financial as advisors to the IPO. It might divest anywhere around 35% stake through the IPO.