Chalet Hotels on Monday announced that its board of directors approved raising of up to Rs 500 crore in order to refinance the company’s high-cost debt.
Chalet Hotels mentioned that it was considering raising funds in the form of non-convertible debentures (NCDs) or any other debt instrument in one or more tranches from time to time up to an aggregate amount of Rs 500 crore.
The board also approved raising of funds up to Rs 100 crore by way of borrowing from the company’s promoters for meeting expenses for the residential project at Koramangala, Bengaluru.
In its meeting on Monday, the board of directors at Chalet Hotels also approved revised financial numbers for the quarter ended March 2023 (Q4 FY23) after giving effect to the scheme of arrangement for amalgamation of Belaire Hotels Pvt. Ltd and Seapearl Hotels Pvt. Ltd with the company as wholly owned subsidiaries.
The brokerage firm said, “While industry peers are focusing on the asset light expansion route, Chalet has chosen to grow its hotel room and office rental portfolio over FY23-27E through the ownership route (mix of existing project expansion and long-term leases).”
“We believe that this is the right strategy in an industry upcycle (FY23-FY28E) and we estimate hotel Ebitda CAGR (compounded annual growth rate) of 18 percent over FY23-26E at Ebitda margins of 44-45 percent,” it added. EBITDA refers to earnings before interest, tax, depreciation and amortisation.
Shares of Chalet Hotels are trading 1 percent lower at Rs 436.70. The stock has risen 23 percent on a year-on-year basis.
