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Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Luckn

Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow. U.P. – TOURISM POTENTIAL. UP has wide diversity of Historical Places Religious attractions Culture Forests & Wild Life

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Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Luckn

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  1. Disinvestment ofTourism Hotels/Guest Houses ofGovernment of Uttar Pradesh Pre-Bid ConferenceFebruary 7, 2009Lucknow

  2. U.P. – TOURISM POTENTIAL UP has wide diversity of • Historical Places • Religious attractions • Culture • Forests & Wild Life Over 11.9 Crore Tourist visited Uttar Pradesh during the year 2007

  3. U.P. GOVT INITIATIVES Thrust on infrastructure development • Taj Expressway, Ganga Expressway • Various other Road Projects • New Airport at Kushinagar/ Greater Noida/ Saharanpur • Creation of additional 12000 MW electricity generation capacity by 2012 • Other large initiatives for development of transport infrastructure, urban development, tourism development etc. Increased Plan size. • Thrust on development under PPP mode

  4. PROPOSAL To seek Financial Bids from reputed Technically & Financially capable Private Investors to own 76% equity in each of the 22 SPVs containing 70 existing Hotels / Tourist guest houses owned by GoUP/ UPSTDCL for operating such units in hospitality sector on sound commercial lines.

  5. OBJECTIVE • Development and strengthening of tourism infrastructure in Public Private Partnership • Repositioning the business of existing tourist hotels/guest houses of Government of Uttar Pradesh • To provide best hospitality facilities/environment to domestic/foreign tourists

  6. ADVANTAGE FOR PVT. SECTOR • Ready Infrastructure • Good locations • Large land area – scope for expansion • Clear title – Seller is State Govt. • Newly formed companies – no unknown old liabilities/disputes • Complete Management with Investor • Govt. to act as facilitator • Investor Cell in Udyog Bandhu for Coordinated Action

  7. SCHEME • 70 Units owned byGoUP/UPSTDCL shall be disinvested • These units have been grouped into 22 bundles • Each bundle will form a SPV (Public Ltd. Company) • Units owned by UPSTDCL shall be demerged into SPVs • After Demerger units owned by GoUP will be transferred to respective SPVs. • The demerger process and the formation of SPVs already started

  8. SCHEME… • 76% of equity share of each SPV shall be disinvested • 24% of equity share of each SPV shall be retained by GoUPwhich may be allowed to come down to 11% • Employees will be offered VRS before disinvestment • Remaining employees in units will be transferred to respective SPVs • Terminal Dues like Gratuity and Leave Encashment of remaining employees as on date of transfer would be funded by GoUP and kept in separate Account.

  9. THE BUNDLES

  10. TAJ VIRASAT (SPV 1) • Rahi Tourist Bungalow, Raja Mandi, Agra • Rahi Tourist Bungalow, Mathura Employees - 35

  11. GYANUDAY (SPV 2) • Rahi Tourist Bungalow, Sarnath, Varanasi • Rahi Tourist Bungalow, Ghazipur • Rahi Tourist Bungalow, Doharighat • Rahi Tourist Bungalow, Ramgarh Taal, Gorakhpur Employees - 17

  12. SIDDHARTH(SPV 3) • Rahi Tourist Bungalow, Balrampur • Rahi Tourist Bungalow, Naugarh, Siddharthnagar Employees - 14

  13. TRIVENI (SPV 4) • Rahi Triveni Darshan, Allahabad • Rahi Tourist Bungalow, Vindhayachal, Mirzapur • Rahi Tourist Bungalow, Neemsar, Sitapur • Rahi Tourist Bungalow, Ayodhya • Rahi Tourist Bungalow, Munsiganj, Sultanpur Employees - 23

  14. SHAHJAHANPUR (SPV 5) • Rahi Tourist Bungalow, Shahjahanpur • Rahi Tourist Bungalow, Sandhi Jheel, Hardoi • Rahi Tourist Bungalow, Hargaon, Sitapur Employees - 4

  15. ADHYAVASAI (SPV 6) • Rahi Tourist Bungalow, Kannauj* • Rahi Tourist Bungalow, Raibarielly* • Rahi Tourist Bungalow, Bhadohi • Rahi Tourist Bungalow, Jagdishpur, Sultanpur • Rahi Tourist Bungalow, Mirzapur Employees - 35

  16. PANCHAL(SPV 7) • Rahi Tourist Bungalow, Bareilly • Rahi Tourist Bungalow, Badaun • Rahi Tourist Bungalow, Kachla Badaun • Rahi Tourist Bungalow, Soron, Etah • Rahi Tourist Bungalow, Sankissa, Farrukhabad Employees – 19

  17. HINDON (SPV 8) • Rahi Tourist Bungalow, (Hindon Motel), Ghaziabad Employees - 10

  18. HASTINAPUR(SPV 9) • Gazal Tourist Resort, Narora, Bulandshahar • Rahi Tourist Bungalow, Muzzafarnagar • Rahi Tourist Bungalow, Shukratal, Muzzafarnagar Employees - 3

  19. BRIJ DARSHAN (SPV 10) • Rahi Tourist Bungalow, Radhakund, Mathura • Rahi Tourist Bungalow, Gokul Gaon, Mathura • Rahi Tourist Bungalow, Barsana, Mathura • Paryatan Complex, Nagla Chandrabhan, Mathura Employees - 3

  20. AWADH (SPV 11) • Hotel Gomti, Lucknow Employees - 98

  21. BUNDELKHAND (SPV 12) • Rahi Tourist Bungalow, Jhansi • Rahi Tourist Bungalow, Mahoba • Rahi Tourist Bungalow, Deogarh, Lalitpur Employees - 17

  22. GARHMUKTESHWAR (SPV 13) • Rahi Tourist Bungalow, Garhmukteshwar Employees - 3

  23. Central Government Assisted

  24. BRIJ (SPV 14) • Rahi Tourist Bungalow, Bateshwar, Agra • Gokul Restaurant, Mathura • Yatri Niwas, Vrindavan • Tourist Complex, Vrindavan Employees - 11

  25. SATYADARSHAN (SPV 15) • Rahi Tourist Bungalow, Shravasti • Rahi Tourist Bungalow, Deoriya • Rahi Tourist Bungalow, Basti • Rahi Tourist Bungalow, Kapilavastu, Sidharthnagar • Rahi Tourist Bungalow, Sunauli, Maharajganj Employees - 14

  26. GANGASARYU (SPV 16) • Rahi Tourist Bungalow, Varanasi • Rahi Tourist Bungalow, Chunar Sonbhadra • Yatri Niwas, Ayodhya Employees - 28

  27. BITHUR (SPV 17) • Rahi Tourist Bungalow, Rania, Kanpur Dehat • Rahi Tourist Bungalow, Tatyaganj, Kanpur Nagar • Rahi Tourist Bungalow, Bithur, Kanpur • Rahi Tourist Bungalow, Khaga, Fatehpur Employees - 9

  28. PASCHIMANCHAL(SPV 18) • Rahi Tourist Bungalow, Moradabad • Rahi Tourist Bungalow, Khurja, Bulandshahr • Rahi Tourist Bungalow, Sardhana, Meerut • Rahi Tourist Bungalow, Kandhala, Muzzafarnagar Employees - 14

  29. MADHYANCHAL (SPV 19) • Rahi Tourist Bungalow, Shikohabad • Rahi Tourist Bungalow, Near Sumer Singh Qila, Etawah • Wayside Amenities, Orraiya* • Rahi Tourist Bungalow, Bhartari, Aligarh* • Rahi Tourist Bungalow, Bewar, Mainpuri Employees - 1

  30. ABHIRANYA (SPV 20) • Rahi Tourist Bungalow, Tiger Den Dudhwa, Khiri • Tourist Complex, Patna Pakshi Vihar, Etah Employees - 3

  31. SANGAM (SPV 21) • Rahi Tourist Bungalow, Allahabad • Rahi Tourist Bungalow, Chitrakoot • Rahi Tourist Bungalow, Bhupiamau, Pratapgarh Employees - 58

  32. TAJ SHILP (SPV 22) • Shilpgram Restaurant, Agra Employees - 8

  33. ELIGIBILITY CRITERIA • Applicant - Companies (Individually or in Consortium with other Companies) Qualifications • Technical - 3 years experience in hospitality services - Average Annual Turnover for last three years from hospitality services –

  34. ELIGIBILITY CRITERIA… Financial - Networth For the Applicants

  35. ELIGIBILITY CRITERIA… For Consortium • Maximum 4 members through SPV/ MoU • Specify Lead Member • Lead Member to hold - minimum 26% interest and should satisfy 51% financial capability - Technical member - minimum 26% interest and should satisfy 51% technical capability - Other members to have atleast 10% interest each - Consortium as a whole to satisfy Financial and Technical Capability • Financial and Technical Capability OF Group Companies upto 2 allowed.

  36. BID PROCESS • Separate Bid for each SPV • Eligible applicants can bid for more than one SPVs • Bid Security – Bank Draft/ Bank Guarantee valid for 6 months - Separate Bid Security for each SPV - Bid Security of highest two Bidders to be retained till completion of Transaction • Amount of Bid Security SPV wise:

  37. BIDDING PROCESS • RFQ and RFP Documents are available for sale • RFQ and RFP to be submitted in separate envelops • Data Room for Due Diligence is opened at Lucknow from 29.01.09 to 17.02.09 • To access Data Room, Interested parties to submit : • Technical & Financial capability duly certified by CA • Audited Balance Sheets • to sign Non Disclosure Agreement • Draft for 20000/-

  38. BIDDING PROCESS… • Reserve Price for 76% equity of each SPV to be announced on February 14, 2009 • Last date of submission of Bids February 18, 2009 • RFQ would be evaluated on February19, 2009 • Bid documents to be evaluated February 20, 2009 • SPV wise Financial bids to be opened February 21, 2009 • Financial Bid – Purchase Consideration for 76% equity of each SPV • Highest financial bid above Reserve Price to be declared Successful bidder • If one Bidder is successful in respect of more than 1 SPV – Cumulative Networth required • Successful bidder to be issued letter of award February 24, 2009 • Share sale agreement and shareholders’ agreement to be signed on sanction of demerger and transfer of units by GoUP

  39. TERMS OF TRANSFER.. • Lock In Period for investor’s shares– 3 years • Inter se transfer amongst consortium members allowed subject to lead and member qualifying technical qualification retaining atleast 26% stake • Minimum Investment per SPV for development -25% of the financial bid of sucessful bidder • Further minimum investment can be by way of equity or loan subject to maintaining minimum Govt equity at 11% post issue.

  40. TERMS OF TRANSFER.. • Raising of loans against existing properties for development of units allowed. • Two GoUP Nominee Directors on the Board of SPV including Non Executive Chairman • Managing Director to be appointed by Investor • Day to Day Management with the Investor • Further Issue of shares on Right basis, GoUP’s option to renounce in favor its Nominee or forego that Right • Investor can pledge his shares for raising loan for Company with GoUP approval • After 3 years if Investor wants to sell its shareholding – first offer to GoUP & vice versa

  41. TERMS OF TRANSFER… Employee Matters • VRS to be given to Regular Employees by UPSTDCL before disinvestment • Remaining Employees in respective SPVs as on date of Transfer of shares to be retained by Investor • Investor also to offer VRS to employees between 6-12 months after purchase of shares • No adverse change in terms of employment • Adherance to Reservation Policy of GoUP

  42. Matters requiring Prior GoUP Approval • Any alteration of the Capital Structure of the Company which has the effect of reducing the Government shareholding to less than 11% of the paid up share capital. • Commencement of any new line of business not related to Hospitality Services and/ or discontinue existing line of Business. • Taking any steps to wind-up or terminate the corporate existence of the Company • Entering into of an amalgamation, merger or consolidation with any othercompany or body corporate. • Establishment of any subsidiary or associated company with objects other than Hospitality Services by the Company. • Sale of surplus land for development of the Unit(s)/ setting up of other Hospitality/ Tourism services in the Company.

  43. Matters requiring GoUP Nominee Directors Presence & Approval - Change in the Main Objects of the Company. • The making, directly or indirectly, of loans or advances in any Financial Yearin excess of Rs.10,00,000 (Rupees Ten Lakh only) to any Person other than in the ordinary course of business of the Company. • Obtaining directly or indirectly, of loans or advances in any Financial Year in excess of Rs.200,00,000/- (Rupees Two Crore only) • The entering by the Company into any business relations or contracts (including the conclusion or termination of Agreement) having commitment exceeding Rupees One Crore with any Associate of the Investor and/or the Consortium Member(s).

  44. Matters requiring GoUP Nominee Directors Presence & Approval… • The granting of any security or creation of any encumbrances on the assets of the Company or guaranteeing the debts or performance of any person for other than the Business of the Company. • Issue of further equity share capital

  45. Thank You

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