International Hotel Investments, a subsidiary of the Corinthia Group, has entered into an agreement with a major Russian tourism company to jointly develop and invest in hotels in the four and five star categories across the Russian Federation.

The agreement with OAO VAO Intourist, signed in Moscow, will come into force once regulatory and other procedures are completed in the coming months.

The intention is to create Russia's largest hotel chain, operating hotels under various brands including the Corinthia and Intourist brands.

Intourist, which was the Soviet Union's pre-eminent tour operating, travel and hotel company, is still a major player in the sector. The company forms part of the London-listed Sistema JSFC, one of Russia's leading conglomerates with investments worldwide, principally in the technology sectors.

IHI and Intourist have agreed to join forces and establish an equally-owned investment fund, initially capitalised with US$100 million, to originate, develop and invest in four and five star hotels in major cities across the Russian Federation, including Moscow.

The parties will pool their extensive hotel and development expertise in establishing a joint management team to construct, refurbish and operate the joint venture's hotels.