WHITBREAD, Britain’s biggest hotel and coffee shop operator, has bought out its Indian joint venture (JV) partner Emaar MGF.
“Whitbread confirms that Premier Inn has completed the acquisition of the 50.1 per cent stake it did not own in the JV with real estate developer Emaar MGF,” the company said in a statement.
A foreign report quoted an unidentified Premier Inn India official as saying the company had trimmed down its investment plans for India.
It is understood Whitbread now plans to build fewer hotels in fewer towns than it originally hoped when it first joined forces with Emaar MGF in 2007. At the time, the partners set out to build 80 Premier Inn hotels in India over a decade with an investment of $600m (£395m).
Emaar MGF is a joint venture between Dubai’s Emaar Properties and Indian financier MGF. Like many subcontinental property outfits, Emaar MGF entered into the hotel-building deal to take advantage of rising numbers of people visiting the region for business meetings and tourism.
However as the global economic downturn pinched demand for accommodation, the firm was forced to put investments on ice and concentrate on reining in its debt.
Emaar MGF’s exit from the JV with Whitbread is expected to be announced in its initial public offering (IPO) prospectus, due shortly.
The company is preparing to tap the stockmarket for Rs 38.5bn (£558m), which would be used to reduce gearing. It was forced to abandon plans to float in 2008 as market confidence evaporated.
City A.M. Reporter