Magnum forays into hospitality sector

New Delhi, Aug 24: Making its foray into hospitality sector, paper maker Magnum Ventures Ltd today said it has injected Rs 102.63 crore to set a four-star business hotel at Sahibabad near Delhi.

''We will put in Rs 32.6 crore in the hotel project from our initial public offering (IPO) and the rest will be funded by loans sanctioned by banks,'' Magnum Ventures Ltd Managing Director Praveen Jain said while announcing the company's IPO.

The company has collaborated with US-based Karlson Group for the proposed project. The US firm will provide technology for the hotel, while the land is owned by Magnum Ventures.

The project is scheduled to get completed by April 2008 but, a soft launch will be done in January 2009 and it should be in full operation by April 2009, he added.

''With the CommonWealth Games slated for 2010, the hotel will be a boon for the visitors as it is just seven Km away from the games venue. We hope once the hotel becomes ready, half of the company's total profit will be from hotel business,'' Mr Jain claimed.

The company would enter the capital market to raise about Rs 53 crore with a public issue of 1.76 crore equity shares of Rs 10 each.

The issue price would be decided through 100 per cent book building process.

The bid will open for subscription on August 27 and will close on August 30. The price band is fixed between Rs 27 and Rs 30 per equity share.

Of the projected Rs 53 crore amount that would be raised through the IPO, Rs 32.6 crore would be spent on the hotel project, Rs 11 crore on the technological upgradation, Rs six crore would be kept as corpus and the rest will be utilised for IPO expenses, the CMD said.

The company owns 62,000 metres of land bank in NCR, of which 10,000 metres has been earmarked for hotel projects.

UNI