EIH Limited gains on fundraising approval of Rs 350 crore

Hospitality major, EIH Ltd, a part of Oberoi Group, which operates hotels under the luxury 'Oberoi' and five-star 'Trident' brands, informed the bourses on Monday that its board of directors in a meeting held on September 7, 2020, has approved the raising of funds by the issuance and allotment of equity shares for up to an aggregate amount of up to Rs 350 crore by way of a rights issue.

The promoters of the company have informed the board that they, along with the promoter group of the company, collectively intend to fully-subscribe to their rights entitlement and have reserved their right to subscribe to any additional equity shares, amongst themselves, in the event of under subscription of the said issue, subject to applicable laws.

The hotel industry is one of the badly hit industries due to the COVID-19 pandemic. This is clearly reflecting in the company’s first-quarter financial performance, where it posted a 90 per cent fall in the net sales to Rs 28.5 crore from Rs 289.63 crore in the corresponding quarter of the previous year. At the EBITDA level, the company posted a loss of Rs 125.40 crore as against EBITDA of Rs 21.55 crore in Q1FY20. The company’s net loss widened to Rs 118.22 crore from Rs 7.1 crore.

As of FY20, the company has a standalone debt of Rs 415 crore.