BackHotel Leela eyes ₹600 crore via PE tie-up in 4 months
Hotel Leela eyes ₹600 crore via PE tie-up in 4 months
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New Delhi/Mumbai: Hotel Leelaventure Ltd is talking to four global private equity firms and is likely to raise ₹ 600 crore by selling stake to one or two of them in four months, vice-chairman Vivek Nair said on Monday.
The five-star hotel operator will offer 14.95% of its equity to prospective investors by issue of fresh shares to help cut debt and lower interest costs.
The promoters of the firm aim to keep their holding at 50.5% after the stake sale, from the current 55%, Nair told reporters.
On 1 March, Nair had told Reuters the firm plans to raise ₹ 950 crore via sale of a property and also by foraying into real estate development to cut its debt of about ₹ 3,800 crore.
The firm’s plans to sell stake to global PE firms comes after it had put off launching a share sale to institutional investors and an issue of foreign currency convertible bonds, he had said.
Hotel Leela’s stock has climbed 5% in March on its plans to pare debt.
Hotel chains in India are riding high on robust occupancy as business travel booms in Asia’s third largest economy.
To tap the robust market, Hotel Leela, part of Global Hotel Alliance, an alliance of global independent hotel brands, aims to attract 35,000 new members in 2011/12 through a guest loyalty programme, similar to airline-alliance arrangements.
Globally this alliance spans around 300 hotels across 48 countries and has enrolled 1.4 million people through the loyalty programme.
So far, Hotel Leela has already enrolled 14,000 members through this programme, aimed at increasing repeat visits to its properties in India, said Sanjoy Pasricha, vice-president sales and marketing at Hotel Leela.
“We are targeting that in the first two years of its operations we would be able to build about 10% of our room revenue coming in through repeat guests who are members of this programme," Pasricha said.
Hotel Leela shares ended up 0.66% at Rs38.1 in a firm Mumbai market.
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