CARE revises the rating assigned to the bank facilities of Kamat Hotels

Credit rating agency, CARE has revised the rating assigned to the long-term bank facilities of Kamat Hotels (India) for Rs 312.13 crore. The agency has revised the rating from ‘CARE BB+‘ to ‘CARE BBB-’. The agency has also revised the rating assigned to the short-term bank facilities of the company for Rs 3 crore. The agency has revised the rating from ‘PR4’ to ‘PR3’.

The revision in the rating takes into account successful execution of major part of the expansion project, partial conversion of FCCB into equity capital, improved operational performance in 9MFY11 as compared to 9MFY10 and ongoing revival in the hospitality industry.

Ability of the company to complete the ongoing expansion in the flagship property on time, ability of the subsidiaries to complete their projects / stabilize their operation without additional parental support and achieve the envisaged Revenue Per Available Room (RevPAR) for the existing properties in a competitive scenario is the key rating sensitivity.

Kamat Hotels (India) (KHIL) has experience of more than three decades in the hospitality industry. It operates the eco-friendly certified five-star hotel ‘The Orchid’ with 245 rooms and four-star business hotel ‘VITS’ with 190 rooms in Mumbai. It has increased its focus on other locations to gain national presence. Total room inventory of the company has increased to 1,022 rooms (16 hotels) in FY10 from 402 rooms (three hotels) in FY06. KHIL also operates canteens, restaurants and a hotel management institute.