EIH zooms on rights issue plan

Oberoi group company EIH Associated Hotels on Monday surged over 14 per cent in early trade on the bourses, after it announced plans of considering a rights issue for raising funds.

In a regulatory filing, the company said its board of directors will meet on March 28, 2012 to consider "raising of equity share capital through issuance of equity shares, on rights basis, to the existing equity shareholders."

The announcement was made after market hours on March 23. Reacting to the news, shares of the company surged 14.46 per cent to touch an early high of Rs 174.10 on the BSE. It was later quoting at Rs 168.60, up 10.85 per cent from the previous close at 10:37 hours.

Similar trend was witnessed on the National Stock Exchange as well, where the stock after opening at Rs 164, jumped 14.19 per cent to a high of Rs 173.75. It was trading at Rs 171.10, up 12.45 per cent at 10:41 hours on the NSE .

In the proposed meeting, the board will also consider amalgamation of EIH Associated's wholly owned subsidiary, Island Hotel Maharaj Ltd with the company, the filing added.

The company owns, manages and operates five star Hotels in major tourist destinations in India. EIH Associated Hotels is an associate company of EIH Ltd, the flagship company of the Oberoi Group.