Kamat Hotels India Ltd (KHIL) is looking to divest land parcels earmarked for hotel developments. The money raised will be utilised to reduce the company's debt.
Kurian Chandy, Chief Financial Officer, said the KHIL was in talks with a host of hotel companies and realtors for the land parcels. Chandy said, "We have decided to divest the hotel sites in Coimbatore, Amravati, Raipur and Nagpur. The land parcels are of sizes ranging from two-40 acres. The real estate has been sitting on the company's balance sheet for about four to five years now," Chandy said. He did not disclose either the acquisition cost, or the realisation expected from the sale of the sites.
According to a report in DNA, KHIL has also deferred its plans for a hotel in Baddi (Himachal Pradesh), citing regulatory issues. Also to reduce debt, KHIL has mooted a proposal to convert FCCBs of USD 18 million raised in 2007. An extraordinary general meeting is scheduled on June 10, this year for resetting the conversion price.
Chandy said, "Converting the FCCBs will help us reduce debt by around Rs 85 crore, thereby increasing net worth. Currently, we have a net worth of Rs 165 crore as against a debt of Rs 407 crore. Once the FCCB is converted, the net worth will increase to Rs 250 crore against a debt of Rs 320-odd crore. The debt burden will be further reduced by using the sales proceeds from divestment of the land parcels."
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This fiscal, KHIL will focus largely on expanding its hotel portfolio in Mumbai and Pune, which are owned properties. The company's brands include The Orchid, VITS, Lotus Resorts and a heritage property in Pune christened Fort Jadhavgadh. In Mumbai, the company is adding 120-odd rooms to its existing 245-room five-star The Orchid.