Hospitality firm Hotel Leelaventure Ltd on Tuesday said it has completed sale of its hotel properties and operations to Canada-based Brookfield Asset Management Inc.
The Rs3,950 crore deal also marks the entry of Brookfield in India’s hospitality market in a big way.
The Mumbai-based hotel chain had announced in March this year that it has agreed to sell four of its hotel assets located in New Delhi, Bengaluru, Chennai and Udaipur along with a land parcel in Agra. The deal excludes its fifth property, located in Mumbai.
In a filing to the stock exchanges, the hospitality firm said that it has received the total amount of Rs3,950 crore from Brookfield on 16 October 2019.
"...The entire consideration, net of transaction-related costs of ₹70 crore were used to repay the banks and financial institutions who were lenders to the Company, in full and final settlement, as one-time settlement," the company said.
As part of the transaction, the Leela brand and trademarks in the hotels and hospitality space have also been transferred to Brookfield for Rs150 crore, the filing said.
On September 26, the Securities Appellate Tribunal (SAT) had dismissed an appeal by ITC Ltd, a minority shareholder in the company, challenging the sale of Hotel Leelaventure's assets to Brookfield.
Following the transaction, Hotel Leelaventure also announced the resignation of its president Rajiv Kaul and chief financial officer Rajan Shah from the company. Instead, the company has appointed Umesh Dombe as the chief financial officer with effect from 23 October, it said.
Set up by C.P Krishnan Nair in 1986, Hotel Leelaventure at one time competed with the likes of Indian Hotel Co. Ltd’s Taj Hotels and EIH Ltd’s Oberoi hotels. The company had started selling its hotels and other non-core assets, including land to pare its debt. As of 31 March 2018, it had an outstanding debt of around Rs3,799 crore. The deal with Brookfield was finalized after more than a year of talks between both the parties.
For Brookfield, the Leela deal follows its investments in commercial office, residential assets and infrastructure projects in India. Since its first buyout of Unitech Corporate Parks in 2013, the Toronto-based company has grown aggressively, building and managing nearly 25 million sq. ft of commercial real estate.