The Hindu Business Line : Hotel Leelaventure board to take up Bangalore property expansion

THE board of Hotel Leelaventure is to meet on November 22 to consider the expansion of its Bangalore property, envisaging the addition of 120 rooms at a cost of Rs 35 crore.

Also on cards is an EGM to approve a proposal to raise funds through the issuance of securities or by the addition of equity.

The EGM is expected to be held by December-end and the group hopes to raise Rs 170 crore - Rs 180 crore.

Meanwhile, the company is set to receive Rs 200 crore as interest on Rs 163 crore it had parked with HUDCO in 1997-98 for an aborted hotel project in Delhi.

According to Mr R. Venkatachalam, Director, Finance and Chief Financial Officer, the funds were being raised to reduce the existing borrowings of Rs 650 crore.

Along with internal accruals and the funds expected from HUDCO, the company hopes to bring down its debt to around Rs 200 crore next year.

The expansion of the Bangalore property would be financed through internal accruals and is expected to be completed by October 2005.

Talking to Business Line, Mr Venkatachalam said it was a conscious decision to concentrate on the Bangalore property.

"Bangalore is a happening place and the addition of 120 rooms there would be equivalent to opening a 300-room property elsewhere," he said.

The company is looking to close this fiscal with a turnover of over Rs 300 crore, up Rs 50 crore from the previous year, Mr Venkatachalam said.

The targeted net profit for the year is Rs 70 crore, which would translate into a ten-fold jump.

The meeting will also take up for consideration amalgamation of the group's wholly owned subsidiary, Vision Hotels & Resorts Ltd.

The group is planning to amalgamate the 70-room resort project coming up in Udaipur with Hotel Leelaventure.

The amalgamation would be through the cancellation of shares and would not involve any change in the equity of Hotel Leelaventure.

Earlier, a BSE announcement said the company's board would approve the proposal for declaration of a special (interim) dividend.