Delta Corp, India’s only listed gaming company has announced that it is looking to divest its 35.6% stake in Advani Hotels and Resorts Ltd., according to a disclosure made by the company to the stock exchange on 19th December 2014. It is learnt that Delta Corp has appointed Yes Bank as merchant banker to explore possibilities of sale of its stake in Advani Hotels. In 2008, Delta Corp had acquired 34.87 per cent stake in Advani Hotels for $36 million.
After the announcement, Delta Corp’s share price closed at Rs. 88.32 on the Bombay Stock Exchange (BSE), up 3.21%. At present, shares are trading at Rs. 87.30 on the BSE. Advani Hotels and Resorts Ltd. have beach resorts across India, including Ramada Caravela Beach Resort in Goa which also hosts the onshore casino Goa Nugget. Delta Corp still owns three of the six offshore casino licenses in Goa and is considered to be a pioneer in starting legal casinos in India.
The decision to divest its stake in Advani Hotels may have stemmed from the fact that Delta Corp has suffered net losses in the preceding two quarter ending September 2014 and June 2014 and thus needs funds for the growth of its gaming and real estate businesses. Delta Corp has suffered net loss of Rs. 3.55 crores for the quarter ending September 2014 and a loss of Rs. 19.57 crores for the quarter ending June 2014. Advani Hotels on the other hand has largely been in the green for most quarters this year and had only suffered a net loss of Rs. 2.20 crores in the previous quarter.
With the offshore casinos not performing up to expectations and no announcement of the launch of its Daman casino (despite several announcements regarding the impending launch and commencement of Daman resort in March 2014), it remains to be seen whether Delta Corp will be able to revamp and revitalise its strategy to stay in the green in future.