Mumbai-based Hotel Leelaventure is reportedly in talks with sovereign wealth funds including Abu Dhabi, Qatar and Malaysia to sell properties in Delhi and Chennai for around Rs 1,850 crore in order to pay debt.
The hotels are the The Leela Palace, Delhi and The Leela Palace, Chennai.
News of the pending deals sent shares of the company to its biggest jump in a in almost five years.
The Indian Express reports that while the foreign investor may pick up 74 percent interest in the hived-off entities, Leelaventure will retain a 26-percent stake and continue to manage the luxury hotels.
The plan was first reported in February that Leelaventure was selling the two hotels, and the the company informed the stock exchanges thusly: “In terms of a Corporate Debt Restructuring (CDR) package being implemented, the company has to reduce its debts through sale of assets.”
The Leela chain, in which ITC Hotels holds a 12-percent stake, has been in the red for the past several quarters, hit by business slump, competition and demand-supply mismatch.
Last month, Kohlberg Kravis Roberts & Co., a buyout firm, reportedly looked to lend as much as $327 million to Hotel Leelaventure against the two properties.
Hotel Leela has maintained that it will sell some of its non-core assets such as land and commercial buildings to raise funds and bring down the debt levels which as of last month stood at over Rs 4500 crore.