Hospitality chain Hotel Leela Venture Ltd is planning to raise Rs 700 crore by selling its non-core assets. The company is looking at sale of land parcels in Hyderabad, Pune, Bangalore and a business park in Chennai to reduce its debt burden, Vivek Nair, vice-chairman, Leela Palace and Resorts, told reporters here on Wednesday on the sidelines of a press conference to announce the launch of its Noida hotel.
The company has gone for corporate debt restructuring to manage its debt of around Rs 4,000 crore. Leela Group, which has decided to go for an asset light model, is 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 hotel is part of mixed use project development, “Supernova” with an overall investment of Rs 2,700 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, said Nair.
The Leela Group has plans to open hotels in Jaipur and Bangalore. By 2016, the company would have 3,000 rooms in its portfolio.
On being asked whether the company plans to convert its entire business model to only management contracts, Nair said: “Worldwide, hotel companies are doing so and keeping only a few trophy assets.”
We may also go for a mix of both management and ownership in the long term. Our next cycle of growth is through management contracts.”
More From This Section
Currently, it has around 2,200 room inventory across eight hotels in Bangalore, Gurgaon, Mumbai, New Delhi, Chennai, Goa, Kovalam and Udaipur. Of these, two follow the management contract model.
The company has also plans to launch Leela residences in partnership with Supertech to provide luxury service apartments.