Reliance to acquire 73% stake in Mandarin Oriental New York for $98m

This deal will add to the conglomerate’s consumer and hospitality footprint

Set up in 2003, Mandarin Oriental New York is a luxury hotel at 80 Columbus Circle, adjacent to Central Park. Photo: Mandarin Oriental Hotel Group

Reliance Industries, the Indian conglomerate controlled by billionaire Mukesh Ambani, has agreed to buy an indirect 73.37 per cent stake in Mandarin Oriental New York for $98.15 million as it seeks to expand its investment portfolio beyond its petrochemicals business.

Reliance Industrial and Holdings Limited, a wholly owned subsidiary of Reliance Industries, entered into an agreement to acquire the entire issued share capital of Columbus Centre Corporation, a company incorporated in the Cayman Islands and the indirect owner of the stake in the luxury hotel, the company said in a statement on Saturday to the Bombay Stock Exchange where its shares are traded.

The transaction is anticipated to close by the end of March 2022 and is subject to customary regulatory and other approvals, according to the filing.

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The company said it also plans to buy the remaining stake from other owners at the same valuation.

“In the event that the other owners of the hotel elect to participate in the sale transaction, RIIHL would acquire the remaining 26.63 per cent, based on the same valuation used for the acquisition of the indirect 73.37 per cent stake,” Reliance Industries said.

This acquisition will add to the group's consumer and hospitality footprint, Reliance said.

The group already has investments in Indian hotel operator EIH Ltd (the Oberoi Group’s flagship company), Stoke Park in the UK and is developing a convention centre, hotel and managed residences in Mumbai’s Bandra Kurla Complex business district, the company said in the statement.

Earlier this week, Reliance Industries bought a 25.8 per cent stake in Bangalore-based delivery company Dunzo for $200m in a move to boost its retail portfolio.

In the event that the other owners of the hotel elect to participate in the sale transaction, RIIHL would acquire the remaining 26.63 per cent

Reliance Industries

Set up in 2003, Mandarin Oriental New York is a luxury hotel at 80 Columbus Circle, adjacent to Central Park.

The hotel has won many influential awards including that of AAA Five Diamond Hotel, Forbes Five Star Hotel and Forbes Five Star Spa, among others, according to the exchange filing.

The property had revenue of $115m in 2018, $113m in 2019, which fell to $15m in 2020 during the Covid-19 pandemic.

Reliance Industries raised $4 billion from a three-tranche US dollar bond issuance this month to refinance its existing debt. It raised $1.5bn in a 10-year tranche, $1.75bn in a 30-year tranche and $750m in a 40-year deal, Reliance told the Bombay Stock Exchange.

The latest announcement from Reliance comes as the company plans to expand its operations globally to boost growth. Last year, it formed a wholly owned subsidiary in the UAE that will trade oil, petroleum, petrochemical products and agricultural commodities.

Other recent investments by the company include $144m in US energy storage company Ambri along with other investors including Paulson & Co and US billionaire Bill Gates.

Reliance New Energy Solar, a wholly owned unit of Reliance Industries, will also buy the UK’s Faradion, a sodium-ion battery technology business, for an enterprise value of £100m ($135m).

It also bought a stake in a high-end fashion brand owned by Indian designer Manish Malhotra last year as part of its expansion plans.

Updated: January 9th 2022, 11:48 AM