Wednesday, July 05, 2017

Analysis: Selling Air India's dying hotel business will be a tough task

Hotel Centaur in Delhi now waiting to be demolished to make way for aircraft parking bays for an expanded international airport is in many ways a simulacrum of Air India’s own fortunes. The last time this iconic hotel, one of the two run by Air India’s subsidiary Hotel Corporation of India (HCI), ever made a profit was in 2006-07. This was the time when the infamous merger of Indian Airlines and Air India, now a matter of Central Bureau of investigation (CBI) inquisition was also executed. The hotel along with Centaur Lake View in Srinagar have been on the chopping block since 2002 but have yet to find any buyers.

Arun Shourie, then disinvestment minister in the Vajpayee government, had kickstarted the process of selling off these properties. JP Morgan was appointed as an advisor on the disinvestment process. In October 2003, advertisements were calling for bids for the Delhi and Srinagar Hotels. According to company’s financials of the time, 39 bids were shortlisted by the government out of which 20 submitted the earnest money of Rs 1 crore required to be considered a serious bidder. The interested parties were taken for inspection of the properties. Air India’s annual report notes, “Since there were delays in filing the financial bids, 6 parties withdrew and their earnest money has been refunded. Now 14 parties are left in the fray. A view on calling for the financial bids will be taken by the government soon.”
05/07/17 Sai Manish/Business Standard