Hotel Leelaventure Ltd, after selling one of its non-core assets — an IT park in Chennai — to Reliance Industries for Rs 170 crore, is now keen on mopping up another Rs 2,500 crore to ease its debt burden. According to Krishna Deshika, Chief Financial Officer, the money raised from selling the IT park will be used to service the company’s Funded Interest Term Loan (FITL).
Deshika told Business Line that the company would raise up to Rs 2,500 crore by offloading more assets and liquidating its stake in a couple of hotels.
The company expects the housing projects it has been developing in Bangalore and Pune, jointly with local developers, to fetch Rs 350 crore in the next couple of years.
“And we are planning to sell up to 74 per cent stake in any two of our hotels to mop up around Rs 2,000 crore by the end of next year,” he said.
The debt-laden hospitality major recently got a breather, as its restructured repayment plan was accepted by the lenders. It received a 24-month moratorium for the outstanding principal amount of Rs 3,000 crore it borrowed from a consortium of 17 banks, and 23-month moratorium for the interest portion as well. Hence, the total interest, at 11 per cent per annum, will be converted into FITL and needs to be serviced from January 2014.
It applied for corporate debt restructuring (CDR) in February 2012. At the September 12 meeting with the banks, Leelaventure was told to repay all outstanding principal amounts in eight years from January 2014.
It also has to pool in all its hotel properties (other than the Bangalore hotel) as security against the loan amount from the CDR lenders. The pooled securities include the company’s hotels in Mumbai, Goa, Udaipur, Delhi and Chennai.
As on date, the company’s total debt is Rs 4,300 crore. Besides the dues to the 17-bank consortium, it owes Rs 900 crore to HDFC and SBI Singapore (in the form of ECBs).
For the Rs 900-crore debt that does not come under CDR, the company has entered into a separate understanding with the lenders, said Deshika. The Bangalore hotel is with these lenders as security. Hence, the loan is being serviced from the operating revenues of this property.