Leela might get more time to complete debt restructuring
Likely to benefit from infra-status accorded to hotel sector with development cost of over Rs 200 cr
Jan 23, 2014
Source : Business Standard


DELHI: Hospitality company Hotel Leelaventure is likely to get an extension for its corporate debt restructuring (CDR) exercise, scheduled to be completed by March.

The hospitality company is likely to draw the benefits of infrastructure status, as it has a development cost of about Rs 200 crore, a criterion in a hotel company being given the status. According to a report by HVS, infrastructure status will help Leela secure a longer loan repayment period of up to 15 years, and get interest rates 100-200 basis points lower than current ones. “The whole restructuring will become a lot easier for Leela and it may buy more time to tide over the debt crisis. Besides, banks cannot manage assets such as luxury hotels. They would not want it on their balance sheets,” said a senior hospitality sector executive.

To a query on its debt restructuring, the company did not wish to respond.

The Leela group has debt of about Rs 4,700 crore on its books and the company hasn’t managed to raise the funds required to write off the debt through the sale of non-core assets and some equity in core assets, including the Chennai and Bangalore properties.

With the hospitality sector seeing a slowdown in investment, the company hasn’t been able to find investors, though experts say this year could see a spurt in transactions.

The Leela group is pursuing an asset-light strategy. Early last year, it had sold its Chennai Business Park to Reliance Industries for Rs 170 crore. The group plans to raise Rs 3,000 crore by selling non-core assets alone. These include some of its land parcels in the country. “2013 has been a year of learning. This year, we are hopeful all our initiatives will see fruition. There will be no distraction and we can focus on uninterrupted business,” said Rajesh Jhingon, executive vice-president (operations), Hotel Leelaventure.

The company also signed a management contract last October with Shri Colonizers and Developers, which is constructing a 175 room hotel at Lucknow in Uttar Pradesh. The hotel is expected to come up in three years from the date of receiving all necessary approvals. Besides, it also managed to sell its stake in Leela Kovalam while retaining the management rights of the property in 2011 for Rs 500 crore.

The hotel company is also coming up with its ninth property in Noida through a management contract agreement with real estate developer Supertech. The 250 room luxury property is expected to be ready by 2016 at an investment of Rs 450 crore.

The company will also tie up with private equity investors to develop hotels in Agra and Lake Ashtamudi in Kerala where it owns land banks.

Latest Realty News

Tata Housing plans to come up with 5 signature villas in Delhi
Jan 22, 2014
DELHI: Realty major Tata Housing plans to develop a super luxury residential project in the heart of national capital comprising 4-5 expensive villas in a price range of Rs 130-170 crore each.
Cabinet approves Amritsar-Kolkata Industrial Corridor project
Jan 22, 2014
DELHI: The Union Cabinet today gave its approval for setting up the Amritsar-Kolkata Industrial Corridor (AKIC) and formation of the AKIC Development Corporation (AKICDC).
Cabinet approves Japanese loan assistance for DMIC Projects
Jan 22, 2014
DELHI: The Cabinet Committee on Economic Affairs has approved the utilisation of Japanese assistance under the Japan International Cooperation Agency (JICA) through Special Terms for Economic Partnership (STEP) of Japanese official development assistance loans for the Delhi Mumbai Industrial Corridor (DMIC) project and the operational rules, terms and conditions of this tied loan facility.
Gurgaon to see number of lease renewals in office spaces in 2014&15: Report
Jan 22, 2014
GURGAON: Gurgaon is expected to witness significant number of lease renewals in office spaces 2014 and 2015 as companies that had set up offices in 2004 - 2006 are approaching the end of their lease terms .
Supertech to invest Rs 1350 crore on new housing project in Noida
Jan 22, 2014
DELHI: Realty firm Supertech will invest Rs 1,350 crore over the next three years to develop a new housing project in Noida.
Green light for industrial township in Gr Noida
Jan 21, 2014
DELHI: The government on January 20 approved an investment of over Rs 1,700 crore in creating trunk infrastructure such as roads, bus rapid transit system and telecom and IT infrastructure for an industrial township, in an attempt to leverage it to attract private investment of over Rs 33,000 crore near the town in Uttar Pradesh where development has slowed down with attention diverted to the Yamuna Expressway.
Supertech announced the launch of ‘The Romano’
Jan 21, 2014
NOIDA: Supertech Limited, India’s leading real estate developer, after successfully deliveringmany magnificent projects in Noida has announced the launch of another residential project ‘The Romano’ – Roman Style living in Sector 118, Noida. The project will be a perfect mélange of ancient glory and contemporary luxury.
Retirement homes: Making retirement living fun
Jan 21, 2014
DELHI: In any city of India you will find a number of senior citizens living alone in palatial houses. Most of these senior citizens have children who have either gone abroad for work or are living in some other city. Some have the children living just a few kilometres away. Life has certainly changed a lot in the last 20 years for the retired older generation. But things are going to get better as retirement homes have started coming up across India.
New DDA chief eased land row
Jan 21, 2014
NOIDA: Balwinder Kumar, the IAS officer who steered the Noida Authority through the land acquisition crisis two years ago, has been appointed vice-chairman of Delhi Development Authority. Kumar will take the reins from D Diptivilasa. Before his appointment, Kumar was development commissioner with the Union textiles ministry.
NCR board allows tourism in eco zones
Jan 21, 2014
DELHI: In what is being described by activists as an environmental disaster, the NCR Planning Board on Monday cleared crucial provisions to allow tourism in natural conservation zone (NCZ) such as Aravalis, Yamuna riverbed and areas around major water bodies, albeit setting a cap on the area that can be used for tourism. Activists say that this is the thin end of the wedge as, once allowed, there will never be a proper mechanism to measure that the cap is really being observed.

Latest Realty News Of State

Realty Talk's