Financial Daily from THE HINDU group of publications
Monday, Jul 01, 2002
Industry & Economy
AI, HCI boards to discuss Centaur sell-off funds use
NEW DELHI, June 30
THE boards of Air India (AI) and its subsidiary, Hotel Corporation of India (HCI), are to meet in Delhi on July 10 to discuss a variety of issues, including how the money garnered from the disinvestment of HCI's Centaur hotels should be utilised to meet the various requirements of the airline, including its working capital needs.
HCI, which owned and operated five hotels under the Centaur brand in Mumbai, Delhi, Srinagar and Rajgir, is a fully-owned subsidiary of AI. The disinvestment of the properties in Mumbai and Rajgir garnered more than Rs 200 crore, with the disinvestment of Juhu Centaur alone bringing in more than Rs 153 crore, while the Mumbai airport Centaur attracted the highest bid of Rs 83 crore.
Though the Cabinet Committee on Disinvestment (CCD) approved the disinvestment of the various Centaur hotels in different parts of the country some time back, the proceeds have flowed into the coffers only recently.
A case in point is the disinvestment of the Juhu Centaur Hotel which got the CCD nod in November last year. However,
Tulip Hospitality Services Ltd (THSL), which emerged the highest bidder with a quote of Rs 153 crore in November 2001, was able to complete the deal on May 31, 2002, when the Government received Rs 140.07 crore from THSL as final payment.
Meanwhile, the top brass at HCI is now concentrating on completing the process of due diligence for the Delhi Centaur and the Chefair flight kitchen so that divestment of Government equity can be done smoothly and in the shortest possible time.
"We are working in a time-bound manner and hope to complete the process of disinvestment of the Delhi Centaur and Chefair in the next two months," sources told Business Line.
Besides, efforts are also afoot to solve the contentious issue hindering the sale of the Centaur property in Srinagar, with a high-powered HCI team scheduled to visit the State shortly to sort out any glitches in the sale.
Air India has already indicated that it proposes to utilise the funds from the HCI disinvestment for product upgradation, adoption of information technology and for funding a voluntary retirement scheme (VRS), among others.
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