 Sterling Resorts revamping company
Sterling Holiday Resorts (India) Limited has plans to build 20 business hotels with a total capacity of 2,000 rooms and 18 heritage hotels at places of religious, cultural and historical interest all over India in the next five years, its chairman and managing director, R Subramanian, has said.
"With Himalayas for mountain tourism, 7,900-km coastline with sunshine round the year for beach tourism, our matchless temples, forts, monuments for historical tourism, the growing business and medical tourism, India is emerging as a major tourism destination and Sterling Resorts, with its 20-year experience in the industry, is in a position to take advantage of this growth and build strong operations resulting in significant rewards to all its stake holders," he said. To strengthen the finances, the company is organising a foreign currency convertible bond to the tune of $ 15 million and is getting the approval of the shareholders in the ensuing EGM on February 9, 2006.
The company has announced plans and strategies to revamp its operations and setting the company on course to fast growth. The company has announced a three-year plan to settle all its debts, refurbish its existing resorts and complete all the pending projects. The company will also expand its sales of timeshares and hotel rooms significantly.
The refurbishing plan of 1,437 cottages involves replacing TV sets, kitchen equipment, refrigerator, upholstery and changing the furniture wherever required. This also includes upgrading common facilities such as restaurants, conference rooms and gardens.
Subramanian said construction activities have commenced in Yelagiri. The cottages are ready in Chail and the company is awaiting licences before commissioning the resort. Construction in Lonavala, Mahabaleshwar, Coorg, Shirdi, Beemtal, Thekkady and Coorg and other locations will commence in April 2006. Additional apartments at Munnar and a second resort in Goa are also on the drawing board.
Subramanian traced the history of the company and its future plans. He said Sterling started selling timeshare concept in 1986 to the Indian public; the first resort at Kodaikanal became operational in 1988 followed by Udhagamandalam (Ooty) in 1990 and 10 other resorts in the subsequent years in Udhagamandalam, Kodaikanal, Yercaud, Munnar, Goa, Puri, Darjeeling, Manali, Mussoorie,
Swamimalai.
The company sold one lakh timeshares and commenced project work in a number of locations including Lonavala, Mahabaleshwar, Corbett, Beemtal, Chail, Shirdi, Tirupati, Thekkady, Peermade, etc. However, by April 1996 the entire investment market including the stock market, fixed deposit market and mutual fund market collapsed impacting the sale of timeshares, he said. Sale of timeshares plummeted causing huge losses to the company. The company was forced to suspend payment to its creditors and bankers, retrench staff and rationalise its operations. By 2001, the company was able to achieve break-even and started making payments to some of its small creditors. By 2004, the properties of the company had appreciated significantly in value creating substantial additional resources to pay its creditors and solve its financial problems. The increase in resort occupancy is helping the company in improving revenues and profits.
The strong stock market made it possible for the company to make preferential issue of shares to the major shareholders bringing in Rs 45 crore into the company, Subramanian added.
The company has entered into an agreement to sell one of its properties to Wipro to pay a significant portion of its liabilities. Arrangements have been made for selling some more surplus properties to raise revenue to pay the remaining debts and refurbish all its resorts at a cost of Rs 33 crore. The pending projects will be completed at a cost of Rs 15 crore. The company has so far paid its creditors around Rs 30 crore and the remaining liabilities will be paid as per the agreement entered into with the various creditors, Subramanian said.
R Rangaraj
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