Hotel Leelaventure has executed an agreement for sale with the Mukesh Ambani-promoted Reliance Industries (RIL) to sell its IT Park building in Chennai for a consideration of Ra 170.17 crore.
The board of directors of the Leelaventure in November last had given approval for selling the property to part retire its huge debt to the tune of R4,250 crore. RIL is likely to house its 4G operations in this IT park.
Leelaventure had also sought shareholders’ nod to approve the corporate debt restructuring scheme and the issuance of equity shares to CDR lenders upon exercising their right to convert loans into equity shares in future.
The hospitality major had built super luxury hotels in Udaipur, Delhi and Chennai with a total cost of about R3,500 crore. Further the company had also invested about R350 crore in land in Pune, Hyderabad, Bangalore, Agra and Ashtamudi, and about R150 crore for an IT park in Chennai, which has now been sold to RIL.
These investments were planned to be funded by a combination of equity and debt and accordingly FCCBs of about $100 million and euro 60 million had been issued. However, due to depressed equity market, the FCCBs did not get fully converted to equity and the company had to redeem the said FCCBs.
The company had a debt of about R4,250 crores, as on January 1, 2012.
“The global recession and the Mumbai terror attacks adversely affected the average room rates and occupancies of our hotels. Under the circumstances, the company applied for debt restructuring, through SBI, in February 2012 with January 1, 2012 as the cut-off date,” the company said.