Hotel Leela Venture to sell five assets, stock hits upper circuit

Hotel Leela, an Indian luxury hospitality group, has entered into a binding agreement with a Brookfield Asset Management sponsored private real estate fund, to sell four hotels by way of slump sale. The deal is subject to the approval of shareholders, lenders and other regulatory and statutory bodies.

The company will sell four hotels located at Bangalore, Chennai, Delhi and Udaipur and one property in Agra. The total consideration that Hotel Leela would get from this deal is around Rs. 3,950 crore. The proceed of the transaction would be utilised for loan repayment, following which all borrowings of the company from lenders, banks and financial institutions would stand repaid, stated the company’s filing to the exchanges.

On the other hand, these properties contributed nearly 80 per cent to the company's FY18 total income and comprise 88 per cent of its total net worth. After the sale of these properties, the company would continue to operate the hotel in Mumbai and own certain land in Hyderabad and the joint development project of residential apartments with Prestige Developers in Bangalore.

In response to this development, the stock of Hotel Leela reacted positively and touched an upper circuit limit of Rs. 11.63 apiece, up by nearly 5 per cent.