While speculation is rife that the Leela Group is close to signing a deal with the Saudi Arabia-based industrial contracting tycoon Mr Ravi Pillai to sell its upcoming hotel property in Chennai, sources rubbished the market talk.

On the condition of anonymity, the person said though Leela has been intending to exit the property for some time now, no one has come forward and shown any interest so far. The current market condition would not allow the company to exit now. “It may happen one day. But as I see it, not for now.”

Leela Ventures' 14-storey Chennai property is close to completion and is in the process of acquiring ‘some final clearances' from the Ministry of Environment.

The Leela group, in August last year, sold its Kovalam property to Mr Pillai for Rs 500 crore. It acquired this property for about Rs 150 crore in 2005. The company in its statement said the deal was pursuant to the decision of the Board to pursue an asset-light strategy to reduce its debt. The company was laden with a debt of over Rs 3,500 crore.

Immediately after that, in an interview to Business Line , Mr Pillai said that he had entered into preliminary talks with the group to acquire more properties owned by it. However, he refused to identify the properties.

The group manages luxury hotels in Bangalore, Gurgaon, Mumbai, New Delhi, and holiday escapes at Goa and Udaipur. It has marketing tie-ups with Kempinski of Germany, and Preferred Hotels group of the US.

The company's shares closed a little lower at Rs 33.25 on the NSE today, from the previous close of Rs 33.50.

> rravikumar@thehindu.co.in

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