Hotel Leela Venture, heavily stressed by debt, received great relief on Monday. The group has announced to sell its four hotels and one property to Canadian Investment Fund Brook-field, for 3,950 crores. This deal includes the company’s Delhi-based hotel. According to media reports, the company is in debt of Rs 3,799 crore. This deal will make it easier to repay the entire loan.
In June last year, the board of Hotel Leela Ventures had prepared a proposal to give 125 million equity shares to its largest lender JM Financial. According to this proposal, after dividing these equity shares, the stake in JM Financial Hotel Leela Ventures was increased from 26 percent to 75 percent.
Hotel Leela Venture said in a regulatory filing that the company would sell 100% of the company’s stake of Leela Palace and Resorts, along with hotels located in Bangalore, Chennai, Delhi, and Udaipur. This firm also has properties in Agra and have also licensed the development of the hotel.
According to information given by the Hotel Leela Ventures, JM Financial Reconstruction Company, which is among its major lenders had earlier filed a petition in the Mumbai branch of National Company Law Tribunal. This petition was filed under Section 6 of Insurance and Bankruptcy Code 2016.
The company said that the amount received from this sale will be used to repay the dues of lenders. After the completion of this transaction, the loan will be withdrawn from all the banks and Financial Institutions. After the sale, the company will continue to operate the Mumbai-based hotel and the land in Hyderabad will remain owned by it. Apart from this, the company will continue to work on the joint development of residential apartments with Prestige in Bengaluru.
Earlier, Mukesh Ambani had helped Anil Ambani’s RCOM by paying the loan amount. After the news came, the Hotel Leela shares got a strong boost and in just a few minutes, the stock grew 10 percent to Rs 12.24. Last week, the valuation of this fast-growing company increased by Rs 70 crore to Rs 771 crore.