Hotel Leelaventure Ltd is looking to raise Rs 2,500 crore over the next two years, either through divestments or by way of rights or bond issue, or Qualified Institutional Placement (QIP) as equity markets improve. The company is going through a Rs 4,300-crore debt restructuring exercise approved by lenders in June this year, and is already in the process of selling its non-core assets as part of the programme.
It is planning to divest stake in at least two of its existing properties and take them back on a management contract, or raise the said amount through a rights issue, Foreign Currency Convertible Bonds (FCCB) or QIP.
Vivek Nair, Vice Chairman and Managing Director, Hotel Leelaventure, said, “The company will take a decision in the next two years on the divestment of its existing properties and taking it thereafter on a long-term management contract with its brand intact.” He said the company is also open to raising the money by way of rights issue, FCCB or QIP, according to a report in The Financial Express.
Of the six properties that Leela currently owns in Bengaluru, Goa, Mumbai, New Delhi, Udaipur and Chennai, the company could look at divesting stakes in its recently opened Chennai property and one more, which Nair refused to divulge. “Chennai has just opened and has been received well in the market over our competition. We would wait perhaps a year or so for the RevPars to improve, so that we get a good valuation,” said Nair. RevPar indicates revenue per available room, a performance metric for the hospitality industry. He also said that even for the two properties where the company is evaluating divesting stake, it will only be to a financial investor, on the lines of the sale of Kovalam property. Leela had hived off its Kovalam property into a special purpose vehicle and sold it off to Travancore Enterprises.