Royal Orchid Hotels Ltd., the Indian franchisee of Wyndham Worldwide Corp.’s Ramada chain, is planning its first corporate bond issue to repay debt and finance new hotels in the cities of Mumbai and Hyderabad.
“Part of the proceeds will go in swapping an earlier loan of about 500 million rupees as bonds may be a cheaper option,” Chander K. Baljee, managing director at Royal Orchid said in an interview. “We are building new hotels in Mumbai, Hyderabad and looking at acquisition of new properties.”
The company, based in Bangalore, is seeking to increase the number of its properties to garner a larger share of the 368.2 billion rupee ($8 billion) hospitality market in India. As many as 3.1 million tourists have visited the world’s second-fastest growing major economy since the beginning of this year, according to Bloomberg data.
The planned bond issue will be part of 1.5 billion rupees the hotelier plans to raise through either notes or preferential convertible share warrants, according to a statement to the Bombay stock exchange. The company is yet to appoint an arranger for the issue, which may be completed by September, Baljee said.