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Jhunjhunwala, Damani pick up 14 per cent in Sterling
Billionaire Rakesh Jhunjhunwala and investor Radhakrishna Damani have invested around Rs 80 crore (Rs 800 million) for a little over 14 per cent stake in Chennai-based Sterling Holiday Resorts India Ltd, founded by timesharing veteran R Subramanian in 1986.
It may be noted, Private Equity firm Bay Capital Partners already infused around Rs 100 crore (Rs 1 billion) into the company.
Siddharth Mehta, chairman, Sterling Holiday Resorts India and Founder Bay Capital Partners confirmed the development at the company's Annual General Meeting on Wednesday.
Ramesh Ramanathan, managing director added that both the investors have picked up 14.2 per cent (7.1 per cent each) for an investment of Rs 40 crore (Rs 400 million) each in the last two months.
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Jhunjhunwala, Damani pick up 14 per cent in Sterling
Sterling Holiday's turnaround process began when private equity firm Bay Capital Partners Ltd invested in 2009 and R Subramanian, Sterlings's chairman and managing director, ceded management control, following which Mehta taken over as Chairman of the company.
According to Mehta so far Rs 100 crore (Rs 1 billion) has been pumped by him into the company. "The company is on the verge of a turnaround and this year, we will report operating profit," he said.
"In the last one year, we have been clearing backup and other issues and now we are in the process of enhancing the quality of resorts and a new management has also been put," said Mehta.
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Jhunjhunwala, Damani pick up 14 per cent in Sterling
The company also has become a debt free company, added Ramanathan, who was earlier managing director, Mahindra Holidays.
As part of refurbishment of properties the company is planning to invest around Rs 40 crore (Rs 400 million) and also looking at South East Asia, which will mark its foray outside India.
The company is also planning to add 300 rooms over the next 6-18 months, by leasing out properties to the existing 1258 inventory. It may be noted, the company did not add any inventory for the past 12-13years.
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Jhunjhunwala, Damani pick up 14 per cent in Sterling
"Once our properties are refurbished the focus would be acquiring new customers and to make in-active members to become active," said.
Mehta, who is also the founder of Private Equity firm Bay Capital Partners, which invested around Rs 100 crore (Rs 1 billion) in Sterling Holidays.
Mehta noted, if inactive members becomes active they would bring around Rs 100 crore (Rs 1 billion) worth of business for the company.
S Sidharth Shankar, vice chairman of the Company said as part of jump start the company would look at adding inventories through long-term lease possibly for 9-15 years, with an option to buy.
The company is also looking at entering into South East Asia including Singapore, Indonesia and others.
