The board of directors of Hotel Leelaventure have approved the de-merger of the leasing business of freehold land of Leela Lace Holdings Pvt Ltd into Hotel Leelaventure with effect from April 1, 2011, according to a notice sent to the Bombay Stock Exchange on Monday.

The scheme of arrangement has been done between the hospitality company and Leela Lace Holdings Pvt Ltd and their shareholders. According to the share exchange ratio approved by the board for the de-merger is 1,214 equity shares of Rs 2 each of the Hotel Leelaventure for every 100 equity shares of Rs 10 each held by the shareholders of the Leela Lace Holdings Pvt Ltd on the record date.

Also, 5,000 redeemable preference shares of face value of Rs 100 each of Hotel Leelaventure will be credited as fully paid-up to the sole preference shareholder of Leela Lace Holdings Pvt Ltd, said the notice.

The scheme however is subject to approvals of the shareholders, creditors of both the companies, the stock exchanges, the Bombay High Court and other statutory or regulatory authorities which may be necessary for the implementation of the scheme, said the notice.

Hotel Leelaventure reported a 23.63 per cent dip in its net profit for the quarter ended December 31, 2010, to Rs 22.04 crore against Rs 28.86 crore in the same quarter last fiscal.

The total income of the company, however, grew by 11 per cent to Rs 142.25 crore in the third quarter against Rs 127.74 crore last year.

Hotel Leelaventure's share price closed down by 2.88 per cent at Rs 40.40 on Monday against Friday's close of Rs 41.60.

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