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Lenders to the Leela group of hotels have decided to offload loans worth Rs 4,000 crore to asset reconstruction companies (ARCs). The move is aimed at reducing pressure from big-ticket bad loans on the lenders' balance sheets.
A senior executive of a city-based public sector bank confirmed the move.
The bidding process involving ARCs has been underway through the past few days. An ARC executive said the aim was to conclude the process this month, as banks wanted to get the asset off their books in quarter of this financial year.
A senior executive of an ARC said all lenders to the hospitality company had agreed State Bank of India (SBI), one of the lenders, would offload loans to ARCs. Lenders to the company include Bank of India, SBI's associate banks and Export and Import Bank of India.
ARCs that bid for the loans included JM Financial Asset Reconstruction Company and Edelweiss, said a public sector bank official.
On September 28, 2012, the hotel company had signed a master restructuring agreement with the lenders involved in corporate debt restructuring (CDR). In a presentation this month, the company said it had been deleveraging through monetisation of non-core assets. It has signed an agreement to sell 0.27 million sq ft of land next to a Leela Palace hotel in Chennai, to be developed into office space.
