The well-known hotel chain worldwide, hotel Leela venture Ltd. has decided to raise their funds upto 6 billion after September, so as to trim its debt by selling its non-core assets and issuing equity shares.
Vice Chairman and Managing Director Vivek Nair, said, “Our shareholders had approved raising money through a number of instruments and we are looking to raise 6 billion rupees by issuing shares to sovereign wealth funds or any such investment bodies.” “The funds will be used to repay debt.”
The board of Hotel Leela venture, operating seven luxury hotels under the Leela Palace and Leela Kempinski brands has approved to raise funds up to $130 million. “This plan was later approved by shareholders at the annual general meeting,” said, Mr. Nair.As per a statement by Leela Hotel venture, they are expected to gain approx 950 crore from these sales or joint development. Moreover, the firm has decided to renew the present lease agreements for a long-term tenure.
Apart from this, the Board has plans to operate commercial office in Chennai and to join the reputed builders on company owned land in Hyderabad and Bangalore. The agreement is done for the residential or commercial development.
The Hotel Leela venture is also expecting a huge profit by selling the luxury Hotels in Hyderabad in southern India and Pune in the west. It is also planning for Hotel in Agra, Hotel in Jaipur, Rajasthan, and in Kerala.Mr. Nair believes that there Hotels in Delhi and Chennai will establish in two years and for future development work, cash flow is expected from the existing hotels.
He says, “The above measures will help in substantial reduction in the company’s debt, resulting in lower interest costs. The debt was raised to set up the Udaipur, Delhi and Chennai hotels and to purchase the land banks in Pune, Hyderabad, Bangalore and Agra”.
He says, “The above measures will help in substantial reduction in the company’s debt, resulting in lower interest costs. The debt was raised to set up the Udaipur, Delhi and Chennai hotels and to purchase the land banks in Pune, Hyderabad, Bangalore and Agra”.
He added, “With the Udaipur hotel operational in the second half of 2010 and the Delhi hotel at Chanakyapuri already commissioned and with the Chennai hotel opening in a few months, the company’s turnover and EBIDTA would go up substantially.”
