Synopsis:
Asian Hotels (North) Ltd shares surges above 8% , when the news of the company receiving investment worth Rs 764 crore through preferential issue came out on Wednesday noon.
The shares of Hospitality and real estate companies saw a surge when the company announced that it would secure investments worth Rs 764 crore through the issue of preference shares by executing the Definitive Share Subscription Agreement.
With the market cap of Rs 661 Crore ,the shares of Asian Hotels (North) Ltd gave an intraday high of about 8% as shares went Upto Rs 358.9 compared to its previous day closing of Rs 332.15. The share is moving closer to its 52 week high of Rs 419.5 and is currently trading at 20% discount.
About the Agreement
The party with which the investment agreement is secured is called Elana Holdings Ltd, Singapore. The Company has raised funds through pa referential issue to the Investor, and thereby it is required to execute the Definitive Share Subscription Agreement.
The investor has agreed to invest in the company as a financial investor by way of subscription of 2,31,80,000 equity shares of face value of Rs. 10/- each at a price of Rs. 330/- .(including a premium of Rs. 320 per share)This brings the total value of investment to around Rs 764.94 crore.
The Investment fund infused by the investor in the company will only be utilized exclusively towards payment of outstanding loan along with interest defaulted by the Company.
Few of the other terms of the agreement states that
- The investor shall not exercise any control or influence over the company
- The investor shall not be deemed a member of the promoter group
- The investor shall not have the right to nominate or appoint any directors to the company’s Board of Directors.
Financials and others
The Q1 FY26 sales stands at Rs 70 Crore which has increased 13.13% from Rs 62 crore in Q1 FY25. The Net loss has reduced from Rs 25 Crore in Q1 FY25 to Rs 14 crore in Q1 FY26. The company has reduced its debt but still the company’s cost of borrowing seems high.
Incorporated in 1980, Asian Hotels (North) Ltd is in the business of Hospitality, Real estate and Power Generation. The company is a part of the Jatia Group. It owns a 5-star deluxe hotel, with 507 rooms and suites in Delhi, by the name of Hyatt Regency Delhi. It is also in the business of power generation operations & Real Estate operations.
Written by Leon Mendonca
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