On March 26, 2024, The Indian Hotels Company Limited injected US$ 6.5 million as equity into its wholly owned subsidiary in the Netherlands, IHOCO BV. This infusion of funds aims to support IHOCO BV in making additional investments in its subsidiary, United Overseas Holding Inc, based in the USA. The primary use of this investment will be to repay debts owed by United Overseas Holding Inc and for other operational needs.
IHOCO BV, a Netherlands-based company, operates as the target entity in this transaction. As of March 31, 2023, IHOCO reported a turnover of €0.17 crores, with a noteworthy deficit in Profit After Tax (PAT) amounting to (€22.3) crores. Despite this, IHOCO maintained a substantial net worth of €2,818.17 crores. Notably, the Indian Hotels Company Limited (the Company) currently possesses 100% of IHOCO’s paid-up equity share capital.
Regarding the acquisition, it qualifies as a related party transaction due to the subscription of equity shares in IHOCO, a wholly owned subsidiary of the Company. However, exemptions apply to transactions between a holding company and its wholly owned subsidiaries, especially when their financials are consolidated. Importantly, neither the promoter, promoter group, nor any associated entities hold any interest in IHOCO. Furthermore, IHOCO operates within the hospitality industry, aligning with the Company’s broader sector focus.
With a consideration of Rs. 54.20 crores, converted from USD at a rate of Rs. 83.38. This acquisition involves the Company subscribing to 6,36,008 equity shares of IHOCO, representing 1.71% of IHOCO’s paid-up equity share capital. Presently, the Company owns 100% of IHOCO’s share capital. This move signifies the Company’s strategic expansion and investment in IHOCO’s operations.