Chennai, Feb 18 (): Hotel Leela Venture Ltd will sell 70% of the stake in its Chennai and Bangalore hotel to raise Rs2200 crore to meet the total debt of Rs 4200 crore. This was revealed by the new Chairman and MD Vivek Nair and brother Dinesh Nair who is the joint MD. The company had recently sold its business park in Chennai to Reliance Industries Ltd for Rs175 crore.
Set on 4.8 acres of land, the 11-storeyed hotel features 326 rooms and suites is Chennai’s first and only seafront city hotel, located near Chettinad Palace and Adyar river. Leela Palace is built in Chettinad architecture style. The Bangalore hotel is situated in five acres of land with gardens and built in Mysore palace style. The Bangalore hotel is a profit making one while Chennai is yet to be making profit since Taj opened yet another hotel and ITC came up with another during the same time.
Its hotel in Kovalam beach (near Thiruvanthapuram) was sold for Rs500crore to NRI Ravi Pillai. Pillai has entrusted the management with Leela itself for next 30 years. The new strategy is to move away from non-core business and either dispose of vacant lands and sell stakes in its existing hotels.
Two acres of land near the Bangalore hotel has been marked for high end residences built in JV with local builders. The 13024sqm land in Pune which was for a hotel will be sold or jointly develop to fetch Rs170 crore. It has shelved the plan to build a hotel in Hyderabad’s Banjara Hill and instead the 3.8 acre land will be sold for Rs 125 crore.
The company was hopeful of getting investors since it has a brand value. It will divest its stakes in hotels in other cities like Gurgaon, Goa and Udaipur too but not sell them. It will leave the New Delhi and Mumbai hotel intact. The founder Captain Krishnan Nair recently stepped down to become founder Chairman.