Mahindra Holidays & Resorts India Ltd (MHRIL), the country's largest vacation ownership company, has received its board's approval to hike stake in Finland-based Holiday Club Resorts Oy (HCR) to 88 per cent for €28 million ($31.3 million), according to a stock market disclosure. MHRIL presently holds 23.3 per cent stake in HCR.
It would buy the stake from existing shareholders by exercising a call option to do so. The remaining 12 per cent would be held by HCR management.
The deal, which is subject to regulatory approvals, is expected to be completed within two-three months. MHRL will invest through its overseas subsidiary.
MHRIL had originally bought 18.8 per cent stake in HCR last year with the right to increase its stake holding in the company over two years.
"This acquisition will further strengthen Club Mahindra's proposition of providing leisure family holidays at unique destinations. Our 1.83 lakh members will now have an added choice to visit HCR's resorts in Europe, alongside our existing 45 resorts in India and abroad," said Kavinder Singh, MD and CEO, MHRIL.
MHRIL may also invest an additional €10 million in HCR in the form of equity/loan for growth of the company in near future, it said.
"Our experience of working with the local management of Holiday Club over the last one year has given us the conviction that they are the right partner for our growth strategy in Europe and the Middle East. With this, MHRIL together with Holiday Club will become the world's largest vacation ownership company based outside the US," said Arun Nanda, chairman, MHRIL.
Established in 1986, Holiday Club Resorts Oy is amongst the leading vacation ownership companies in Europe and has 30 resorts out of which 22 are located in Finland including six spa hotels resorts, two in Sweden, six in Spain, five in Gran Canaria. In FY14 it had revenues of €123 million.
Three of the resorts have golf courses and it had three indoor theme parks in Finland as well as one outdoor theme park in Gran Canaria. All the spa hotels have indoor water parks.
Mumbai-based Mahindra Holidays is a part of the diversified Mahindra Group and runs hotels and resorts under the Club Mahindra brand. The company offers family holidays, primarily through vacation ownership memberships. As on March 31, 2015, it had 1.83 lakh vacation ownership members.
It competes with the likes of Sterling Holiday Resorts, which is now under Fairfax-controlled Thomas Cook.
Shares of MHRIL last traded at Rs 236 each, down 0.61 per cent on BSE in a weak Mumbai market on Tuesday.
