Mumbai: Viceroy Hotels (VHL) on Monday said its’ board has approved hiving off its Chennai project into a separate company, a move that will cut debt on its balance sheet.
In a filing to the Bombay Stock Exchange (BSE), VHL said its board has “approved to hive-off the ‘Chennai Project Division’ comprising Chennai Hotel Project’ and ‘Chennai Residential Project.”
Earlier, the company had said that hiving off of the Chennai project division will help reduce debt from the books of VHL. The company is building a luxury hotel property in Chennai, which has a total debt of around Rs450 crore.
The Chennai property would have a total of 387 rooms. Construction started in 2005 at an initial cost of Rs490 crore, which was later revised to Rs560 crore.
The project got delayed because of lack of funds in between and is likely to be operational in the next 2-3 years.
The company’s shareholders have recently approved hiving-off of the ‘Bangalore Project Division’ for a consideration of Rs205 crore. The project will take another one-and-a-half years to get operational.
VHL currently operates two hotel properties in Hyderabad under the Marriott and Courtyard brand names.
The company’s total turnover for 2009-10 fiscal was Rs56.65 crore.
Shares of VHL were trading at Rs35.20 apiece in morning trade on the BSE, up 1.44% from the previous close.