Sterling mulling Rs400 cr fund-raising exercise

Sterling mulling Rs400 cr fund-raising exercise
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First Published: Sun, Jun 03 2007. 06 14 PM IST
Updated: Sun, Jun 03 2007. 06 14 PM IST
Mumbai: Toying with options for its expansion plan, Sterling Holiday Resorts has scheduled two meets with merchant bankers in the city over the next 10 days to discuss fund-raising strategies.
At present in the turnaround mode, the company is considering two options — to raise funds first and then build up infrastructure such as apartment hotels and resorts or to sell timeshares to create infrastructure in a phased manner.
“We will be taking a decision on this within a month,” Sterling’s chairman and managing director R Subramanian told PTI here.
If the company chooses the first option, it could consider raising up to Rs400 crore “for which we will explore all options,” Subramanian said.
This could include a follow-on public issue, FCCB, GDR/ADR issue or private placements. “However, since we have yet to take a decision on the matter, it is premature to talk about this,” he said.
The company, on the come-back trail after nearly ten years of losses, clocked an operating profit of Rs1.5 crore in FY 07 and will be restarting sales of timeshares from the middle of this month, if that option is chosen.
The company which presently owns 12 resorts with 10 more under development, hopes to achieve Rs200 crore in timeshare sales in the next 12 months.
A different business model will be adopted this time, Subramanian said, adding that “from a holiday product so far, we will now switch to offering accommodation for all kinds of travellers.”
Sterling plans to tie-up with three and four star hotels where its timeshare customers can stay by paying normal utility charges. “We will extend this facility at all pilgrim centres and weekend getaways,” he said.
“Tie-ups are already in place in Bangalore and Chennai and one will be formalised soon in Kolkata,” Subramanian said, adding “what we have envisaged is a fundamental change in our product-offering.”
The company is in the recruitment mode with 100 people already been recruited and another 400 in the offing over the next three months. “Our recruitments will mainly be in marketing,” he said.
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First Published: Sun, Jun 03 2007. 06 14 PM IST
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