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Hotel Leela to close PE deal in 6-8 weeks

Hotel Leela to close PE deal in 6-8 weeks
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First Published: Mon, Apr 18 2011. 04 01 PM IST
Updated: Mon, Apr 18 2011. 04 02 PM IST
New Delhi: Hotel Leelaventure Ltd plans to close a deal with private equity firms to raise 6 billion rupees in 6-8 weeks by selling 14.95% fresh equity, a top official said on Monday.
“We are in the final stages of finalising the term sheet,” vice-chairman Vivek Nair told reporters. He had earlier said the company was in talks with four global private equity firms and could end up selling shares to one or two.
The five-star hotel operator aims to halve its debt of about Rs 3800 crore and reduce interest costs by selling stake to PE firms, disposing of and developing its landbank and a possible conversion of foreign currency bonds, Nair said.
The hotel chain plans to raise Rs 950 crore by selling and developing land for residential purposes.
Nair said the foreign currency convertible bonds, issued earlier, may get converted in the fifth or sixth year from now and yield about Rs 400 crore.
On Sunday, Hotel Leela, which is at present predominantly in the luxury space, launched a 260-room property in New Delhi, built at a cost of Rs 1800.
The company is also looking to launch a new brand in the mid-market category.
At 2:50 p.m, its shares were down about 1% at Rs 40.85 in a weak Mumbai market.
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First Published: Mon, Apr 18 2011. 04 01 PM IST