lodge Leela to promote Kerala hotel for Rs 500 crore

updated: Wed, Aug 17 2011. 07 31 PM IST
Mumbai: motel Leelaventure said on Wednesday it has signed a % with Travancore establishments toswitch its resort property in Kerala to a unique motive automobile (SPV), which would be overtaken by way of the latter for Rs 500 crore.
hotel Leela will preserve to function the resort thru a protracted–time period management agreement to be finalised with the SPV, it said in a assertion.
in advance in the day, the hotel operator’s vice-chairman Vivek Nair informed Reuters, it had agreed to sellthe assets at Kovalam to non-resident Indian industrialist B. Ravi Pillai, who owns Travancore enterprises forapproximately Rs 500 crore.
The selection changed into taken to lessen the employer’s debt and the motel operator is actively reviewing proposals for different control contracts in other parts of the us of a, it said.
Leela group offered this belongings in 2005 for approximately Rs one hundred fifty crore, a source with direct understanding of the matter stated.
The organization, which manages luxury accommodations in Bangalore, Gurgaon, Mumbai, New Delhi and Goa amongst others, has a debt of around Rs 3,800 crore.
Indian resort chains are elevating funds however preferring to use the coins to clean up their balancesheet and whole existing tasks than draw new plans.
most Indian hoteliers had been struggling with mounting debt for the reason that global slowdown ofoverdue 2008 that pressured a fact check on the exuberance of preceding years, once they offered land at astronomical expenses and borrowed generously. .
In March, the resort chain had said it intended to elevate about Rs 950 crore over next two years thrusale of property and improvement of real nation, Nair had told Reuters in March.
final week, hotel Leela stated a internet loss for the region ended June on better interest and depreciationfees.
The enterprise had final month achieved a joint assignment with status estate initiatives to developpremium apartments on part of its land financial institution in Bangalore. inn Leela expects to generateabout Rs one hundred fifty crore over four years thru this development.
shares of lodge Leelaventure closed at Rs 38.20 , down 1.55% in a company Mumbai market.