India's First Wine, Food and Hospitality Website, INDIAN WINE ACADEMY, Specialists in Food & Wine Programmes. Food Importers in Ten Cities Across India. Publishers of delWine, India’s First Wine.
 
 
Skip Navigation Links
Home
About Us
Indian Market
Wine & Health
Wine Events
Hotels
Retail News
Blog
Contact Us
Skip Navigation Links
Wine Tourism
Book Review
Launch
Winery
TechTalk
Photo Gallery
Readers' Comments
Editorial
Media
Video Wall
Media Partners
Ask Wineguyindia
Wine & Food
Wine Guru
Perspectives
Gerry Dawes
Harvest Reports
Mumbai Reports
Advertise With Us
Classifieds
US Report on Indian Market Released
Top Ten Importers List 2015-16
On Facebook
 
On Twitter
Delhi Wine Club
 
Leela Looking to Lighten Burden by Selling of Stake

Posted: Tuesday, 22 September 2015 17:26

 

If you Like this article, please click

Leela Looking to Lighten Burden by Selling of Stake

Sep 22: With the galloping interest costs and a sluggish hotel industry, the debt-laden Leela group has decided to sell 24% of their stake after selling of the Goa property at US $111 million (Rs. 7.5 billion) to Malaysia-based conglomerate Met Tube Sdn Bhd recently by entering into a so-called business transfer agreement to sell

Vivek Nair, Chairman and MD of the luxury chain, has reportedly said, “We are talking to three to four international investors, who recognize our expertise in running hotels.” Leela will continue to operate the Leela Goa hotel under Leela brand for a management fee. The company owed over Rs. 5,000 Cr, according to the latest official balance sheet. He hopes to complete the deal before the targeted dated of April 2016.

 “We want to bring down the remaining Rs.4,500 Cr of debt through a combination of equity and debt in a manner that we don’t lose majority control of the company. We may sell at least a 24% stake to a financial investor,” Nair reportedly  said, adding its days of struggling and valuations are over and the investors need to be patient.

While there has been a continual speculation that the hotel is looking for buyers for its exclusive property in Delhi, it sold it Kovalam property in 2011 for Rs. 500 Cr (Rs. 5 billion). In 2013, it sold its IT Park Building in Chennai for  over Rs.170 Cr. to Reliance Industries .In March, the company had said it planned  to sell its hotels in Chennai and Goa. Son of Late Capt. Nair Vivek said that they were now trying to avoid further asset sales. According to the terms of its corporate debt restructuring, it must sell assets to reduce debt.

Leela now plans to sign contracts with other independent  hotel owners to operate their properties under the Leela brand, under the  management contracts.

The company’s debt rose after the global credit crisis of 2008, when it went on a rapid expansion plan by acquiring land across the country. After its 2008 expansion in Bangalore,  the company bought land in Chennai, Pune and Agra, mostly funded by debt and internal accruals, spending about Rs.3,000 Cr. After the financial crisis, the demand in the hospitality sector fell, while interest costs soared.

Nair said Hotel Leelaventure would reportedly have at least 14 hotels with over 2,200 rooms under management contract in the next one-two years, apart from five hotels of its own.

For complete details visit the link on the previous Article:

Source: http://www.dealstreetasia.com

If you Like this article please click on the Like button   

       

Want to Comment ?
Name    
Email       
Please enter your comments in the space provided below. If there is a problem, please write directly to arora@delwine.com. Thank you.
 

Captcha
Generate a new image

Type letters from the image:


Please note that it may take some time to get your comment published...Editor

Wine In India, Indian Wine, International Wine, Asian Wine Academy, Beer, Champagne, World Wine Academy, World Wine, World Wines, Retail, Hotel

     
 

 
 
Copyright©indianwineacademy, 2003-2017 |All Rights Reserved
Developed & Designed by Sadilak SoftNet