Home >Politics >News >Leela Group plans asset sale to pay debt
Vivek Nair says the firm will continue to hold some equity in the assets and will operate them on long-term management contracts. Photo: Hemant Mishra/Mint
Vivek Nair says the firm will continue to hold some equity in the assets and will operate them on long-term management contracts. Photo: Hemant Mishra/Mint

Leela Group plans asset sale to pay debt

The group will set up special purpose vehicles to sell stakes in 3 or 4 hotels, says chairman Vivek Nair

Mumbai: The Leela Group, the former partner of Kempinski AG in India, is in talks to sell part of its properties to pay debt, chairman Vivek Nair said.

The group, whose listed unit Hotel Leela Venture Ltd. had a total debt of Rs5,000 crore ($821 million) as of June, will set up special purpose vehicles to sell stakes in three or four hotels, Nair said in a telephone interview. The company will continue to hold some equity in the assets and will operate them on long-term management contracts, he said.

It definitely won’t be our entire portfolio since the valuation is much higher than the debt on our books, he said.

In July, Leela said its lenders had assigned about 97% of its Rs4,000 crore restructured debt to JM Financial Asset Reconstruction Co. Nair said that the company was working with JM Financial to value properties to sell.

Shares of the hotel operator rose 1.6% to Rs25.50 as of 10:05 am in Mumbai trading. The stock has climbed 47% this year compared with the 22% gain in the benchmark S&P BSE Sensex index.

Hotel Leela Venture, in an exchange filing in May, said its efforts to raise a bridge loan from KKR & Co. failed as the terms couldn’t be set to its satisfaction.

The company operates eight hotels in India, while three more are under construction, according to its website. After partnering with Germany’s Kempinski for 25 years, C.P. Krishnan Nair, the late founder of the hospitality chain, ended that relationship in October 2013, according to exchange filings. Leela hotels are known for their proximity to international airports and central business districts. BLOOMBERG

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Close
×
My Reads Redeem a Gift Card Logout