Hotel Leela to raise Rs 180 cr in expansion plan

Luxury hospitality chain Hotel Leelaventure plans to raise over Rs 180 crore through foreign currency convertible bonds or a private placement of shares. The funds would be used to refinance high-cost debt and to meet the company's expansion plans.

According to company executives," The exact type and the structure of the instrument is under discussion and the placement was likely early next year."

Hotel Leelaventure has a debt of around Rs 660 crore on its books and is planning to reduce it to Rs 250 crore over the next six months to next one year.

Part of the fund will also be used to build a new 120-room wing at its Bangalore property, which would increase the total capacity to over 376 rooms. It is learnt that the estimated cost to build the additional rooms will be around Rs 45 crore.

Hotel Leelaventure is also planning to merge its wholly owned subsidiary -Vision Hotels & Resorts with itself. Vision Hotels owns the Leela Palace, Udaipur. The resort has around 60-70 rooms and is expected to roll out the red carpet for guests by next year.

The company recently received a favourable judgement on the matter pending with Housing Urban Development Corporation (HUDCO) amounting to over Rs 200 crore.

The division bench of the Delhi High Court has directed HUDCO to pay the balance dues along with interest as per the terms of the arbitral award/Delhi High Court order. The company expects that the amount will be received shortly.

The Hotel Leelaventure share opened at Rs 112.45 touching an intra day high at Rs 116.75 and finally closing at 4 per cent higher to Rs 115.65 against previous day close of Rs 111.35 on the Bombay Stock Exchange.