The reportedly debt-stricken hospitality group Hotel Leelaventure has sold one of its prime properties, Hotel Leela Goa, to London-based businessman Raj Bagri, to raise around Rs725 crore, in what's being called one of the biggest single property deals in the Indian hospitality sector.
The 206-room hotel will now change ownership to Metdist, the business group headed by Bagri, an India-born businessman.
Hotel Leelaventure will continue to manage and operate the hotel, which will retain the Leela name.
The acquisition is being made through Ceres Hotels, a local unit created by the Metdist Group.
Raj Bagri is a former chairman of the London Metal Exchange and a former Conservative member of the House of Lords.
The transaction, which is subject to regulatory approvals, is expected to be completed by the end of this year.
In fiscal 2015, the Goa property contributed Rs119 crore (15 per cent) to Hotel Leelaventure's total income of Rs762 crore.
"This investment signifies Metdist Group's confidence in building and growing businesses in India," said Raghav Mittal, president and CEO of MetTube, the parent of Ceres Hotels.
The latest transaction by Bagri will see the diversified Metdist group marking its entry into hotel ownership in India.
The Metdist Group, which owns metal assets in Malaysia and other parts of the world, had, last year, acquired denim brand Spykar.
The Leela Goa deal comes close on the heels of ITC Hotels acquiring the 250-room Park Hyatt, Goa.
The sale of the Goa property is part of Hotel Leelaventure's strategy to pare debt of Rs5,000 crore.
"The divestment 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 strategy and manage more hotels," said Vivek Nair, chairman and managing director of Hotel Leelaventure.
The company, in which India's second-largest hospitality chain ITC owns a stake, had, in 2011, sold the Leela hotel, Kovalam, for Rs500 crore to Saudi Arabia-based entrepreneur Ravi Pillai.
Hotel Leelaventure is also reportedly exploring options to sell or bring in new investors in the 326-room Chennai hotel.