Date:01/04/2008 URL: http://www.thehindubusinessline.com/2008/04/01/stories/2008040150980300.htm

Back Country Club acquiring properties in Dubai, Bangkok

R. Ravikumar

Chennai, March 31 Hyderabad-based Country Club India Ltd is all set to expand its horizon through acquisition of properties in Dubai and Bangkok.

People close to the deal told Business Line that Country Club is in advanced stages of negotiation to buy an existing hotel property in Dubai. “The value of the property could be in the region of Rs 200 crore,” the sources said, adding the company may seek loans from local banks for up to 75 per cent of the cost.

However, when contacted, Mr Y. Rajeev Reddy, Chairman and Managing Director of the company, declined to comment on the development, saying, “We are in an acquisition spree, and that is all I can say at present.”

The company recently mobilised Rs 486 crore through GDR/QIP issue priced at Rs 770 per share. Institutions such as Fidelity Investment, Goldman Sachs and New Vernon picked up 9.88, 6.59 and 4.94 per cent stake respectively. Of the mobilised funds, it has so far spent around Rs 125 crore on acquiring properties in various cities in the last couple of months, with the recent one being a three-acre property with a built-up area of 40,000 sq.ft on East Coast Road in Chennai for a consideration of Rs 16 crore.

Prior to that, it took over an existing club at Khandivili West in Mumbai for Rs 25 crore. The company is also planning to invest another Rs 30 crore in developing and modernising these properties.

At a press conference organised here by the company recently, Mr Reddy mentioned that it was also close to buying a two-acre property (with 28 cottages) at Kodaikanal in Tamil Nadu.

At present, Country Club has 200 clubs across the country of which 40 are owned by the company while the rest are affiliated.

For the nine months ended December 31, 2007, it reported a net profit of Rs 51 crore on a turnover of Rs 227 crore. This was against a net profit of Rs 35 crore on a turnover of Rs 153 crore for the whole of 2006-07.

“We hope to close the current fiscal with a turnover of Rs 300 crore and a profit of Rs 70 crore,” said Mr Reddy. The stock, listed in BSE, closed at Rs 601 on Friday (March 28) losing Rs 1.60 from its previous day’s close.