Hotel Leelaventure to raise Rs1,000 crore through QIP

Five-star hotel operator Hotel Leelaventure Ltd has plans to  raise about Rs1,000 crore through a share sale to institutions, by December, to slash its debt, according to a top official.

The qualified institutional placement (QIP) would involve promoter stake dilution, currently around 58 per cent, by about 14 per cent, reports quoting vice chairman Vivek Nair said today.
 
He said the hotel management would wait until September-October to allow the volatile market to settle down, adding that the company could then look at the QIP issue.
 
Nair, however, said the promoters would try to keep their stake at over 50 per cent in future through creeping acquisitions.
 
Larger rival ITC Ltd held nearly 13 per cent stake in the company at end-June, according to stock exchange data. The firm had earlier planned to raise Rs600 crore through stake sale to private equity players, but was looking at QIP as the preferred mode, he said.
 
Yesterday, the group, which runs luxury hotels in Bangalore, Gurgaon, Mumbai, New Delhi and Goa among other locations, agreed on a property sale in Kerala for Rs500 crore to cut debt.
 
The company would hive off its luxury hotel Leela Kovalam into a special purpose vehicle and sell it to Travancore Enterprises, owned by Dr B Ravindran Pillai, for Rs500 crore.
 
Leela would, however, continue to manage the five-star Kovalam property under its own brand name through a long- term management contract to be finalised by the SPV, The Leela said in a statement yesterday.
 
Pillai who is a Saudi-based an industrialist from Kerala was awarded the Padmashree in 2009.
 
The Leela group had acquired the property in 2005 for a consideration of Rs150 crore.
 
"The deal was pursuant to the decision of the board to pursue an asset light strategy to reduce its debt," the statement said.

Leela had a debt of Rs3,830 crore as of last fiscal.
 
Hotel Leelaventure had reported a net loss of Rs26 crore in the June quarter as against a net profit of Rs9 crore in the corresponding quarter last fiscal. Income during the quarter rose 15 per cent to Rs125 crore (Rs109 crore).
  
The Leela group manages luxury hotels in Bangalore, Gurgaon, Mumbai, New Delhi and holiday resorts in Goa, Kovalam and Udaipur. It is also constructing a luxury hotel in Chennai and has marketing alliances with Germany-based Kempinski, US-based Preferred Hotels and Resorts.
 
The Leela Kovalam has 182 rooms and suites over several verdant acres and is the largest among Kerala's beachside resorts. It straddles two sweeping beaches and is perched on a rock-face offering a panoramic view of the famed Kovalam shoreline.