Luxury hospitality group Hotel Leelaventure Ltd has signed an agreement to sell its marquee property The Leela, Goa, to Malaysia’s MetTube Sdn Bhd for ₹725 crore. This sale is a part of Hotel Leelaventure’s plans to reduce debt.
The company will transfer the Goa property to MetTube’s wholly-owned Indian subsidiary Ceres Hotels Pvt Ltd under a slump sale, subject to regulatory approvals. Hotel Leelaventure will continue to manage and operate the hotel, which will retain its name ‘The Leela, Goa’ under a hotel management agreement, Hotel Leelaventure said in a regulatory filing on Saturday.
“The disinvestment of the Goa hotel and retaining the management of the hotel under the Leela brand is in line with our strategy to restructure our debt, follow an asset light model and manage more hotels,” said Chairman and Managing Director Vivek Nair said.
HLVL expects to complete the sale on or before December 31, 2015.
JM Financial Institutional Securities was the sole financial advisor and Cyril Amarchand Mangaldas was the legal advisor to HLVL, while EY was the sole financial advisor and Khaitan & Co was the domestic legal advisor to MetTube.
HLVL, which has a total debt of ₹5,033.81 crore as on March 31, 2015, had been looking to restructure it. In 2011, it sold its luxury hotel in Kerala - Leela Kovalam - to Travancore Enterprises for ₹500 crore and later in 2013, sold its IT Park Building in Chennai for ₹170.17 crore to Reliance Industries Ltd.
On the BSE, Hotel Leelaventure’s shares closed up 5.42 per cent at ₹21.40 on Friday.