New Delhi, April 21: Hotel chain Leelaventure Ltd is in talks with global investors to sell a majority stake in its prime properties in Delhi and Chennai for around Rs 1,850 crore to cut debt.
Industry insiders said discussions were on with sovereign wealth funds of Abu Dhabi, Qatar and Malaysia.
The foreign investor may pick up a 74 per cent stake in the hived-off entities, while Leelaventure will retain 26 per cent and continue to manage the hotels for a fixed fee, sources said. Talks are, however, at a nascent stage and nothing has been finalised.
The company had earlier informed the stock exchanges that the move was part of its restructuring plan. “In terms of the corporate debt restructuring package being implemented, the company has to reduce its debts through sale of assets,” it had said.
Corporate debt restructuring is a process through which borrowers seek extension of the loan period and adjustment of interest rate. As on September 30, 2013, Hotel Leelaventure’s debt stood at Rs 4,295.15 crore.
Sources said IDBI Capital and the State Bank of India were advising Leela on the transaction.
Leela Delhi is a 260-room property in the heart of the capital for which the group had paid nearly Rs 600 crore to buy land. Located in the diplomatic enclave at Chanakyapuri, it is the capital’s first freehold property.
Leela Chennai is a 326 room sea-facing property.
The Leela chain, in which ITC Hotels holds 12 per cent stake, has been in the red for the past several quarters, hit by business slump, competition and demand-supply mismatch.
Part of the Leela group, the Leela Ventures is looking to divest stakes in a bouquet of hotels, resorts, IT and business parks and real estate.
In 2011, it sold the luxury Kovalam beach hotel to industrialist Ravi Pillai for Rs 500 crore and followed it up by selling the Chennai IT park building for Rs 170.17 crore to Reliance Industries in 2012.