Cash-strapped hospitality chain Hotel Leelaventure is understood to have put its marquee property in Chanakyapuri,New Delhi,on the block. According to sources,the company was negotiating a sale with a foreign hotel chain group but failed to reach closure. FE learns that the structure of the deal was a roadblock and not the price.
The Nairs wanted to keep management control and the Leela flag flying at the Chanakyapuri property which was not acceptable to the potential buyer, said a person close to the development. The deal was valued at R2,000 crore,which is about the same amount that the Nairs had invested in the property,according to sources.
Rajiv Kaul,president,Hotel Leelaventure,denied any plan to sell the property,however,saying that the company is looking at divesting two more hotel properties while retaining 26%. While a sale of the Chennai property is on the cards,Goa or Bangalore could be the others. We are looking at raising R2,000 crore this fiscal from divestment of properties, he told FE.
For the quarter ended December,Hotel Leelaventure reported a net loss of Rs 96.91 crore against a net loss of Rs 99.65 crore for the same period last year. Total income for December quarter stood at Rs 182.90 crore against R181.82 crore for the same period last year. Shares of Hotel Leelaventure closed at Rs 21.05,down 1.17% on the BSE on Tuesday.
Hotel Leelaventure has been reeling under a huge debt of Rs 4,750 crore and last year recast its debt via the corporate debt restructuring (CDR) cell. To retire debt,the company has been divesting non-core assets.
It recently divested its Chennai IT Park to RIL for a consideration of Rs 170.17 crore and hopes to get in excess of Rs 500 crore from plot sales at Hyderabad,Pune and Bangalore.
Hotel Leelaventure has also been looking at divestment of its hotel properties. Last year,the company divested its Kovalam property for Rs 500 crore to Travancore Enterprises,owned by Ravi B Pillai,an industrialist from Kerala based in Saudi Arabia. The company took back the property on a long-term management contract.
In an earlier response to FE,Vivek Nair,CMD,Hotel Leelaventure,had said that the company will take a decision in the next two years on the disinvestment of existing properties and long term management contracts. The company is learnt to be looking at raising Rs 1,000 crore through a QIP or an FCCB when market conditions are better.
Hotel Leelaventure has eight hotel properties in the country of which six are owned by it including Mumbai,New Delhi,Goa,Chanakyapuri,Bangalore and Udaipur. It manages the Gurgaon and Kovalam properties.