Hotel Leela Venture plans a $500-million expansion

Kolkata: Hotel Leela Venture, which is the holding company for hospitality chain Leela Palaces & Resorts, is reportedly exploring options to expand its presence.

The company is reportedly mulling the addition of 1,625 rooms to its current inventory of 1,114, through five new properties.

Industry sources say investments towards the expansion range around $500 million, of which around $250 million has already been invested. The remaining $250 million could probably come from the $110 million in cash on its balance sheet that includes the $100 million raised through a foreign currency convertible bond (FCCB) issue, and the balance $150 million from internal accruals of approximately $40 million per annum over the next four years.

The Leela Palaces Hotels and Resorts owns and manages all four properties across Mumbai, Bangalore, Goa and Kovalam, and is reportedly testing waters in management contract through an upcoming project in Gurgaon, which if successful, could see the company take the management route for a number of more properties.

Till now, Leela has been known mostly for greenfield ventures. According to industry sources, it is now looking to explore the management route, given the quality, ambience and architecture of target properties. Leela''s pipeline includes projects at Gurgaon and Udaipur, which are scheduled to open sometime in 2008, and another at Chennai that will follow suit a year after the duo in north India.

Additional Leela Ventures will go live around 2010, including Delhi, Hyderabad and Pune, all of which fall in the premium deluxe category.