Hotel Leelaventure to raise Rs600 crore through 14.5-% stake sale to PE funds
05 Mar 2011
The Nairs-promoted Hotel Leelaventure plans to sell a 14.5-per cent stake to a clutch of private equity funds in its bid to raise Rs600 crore and reduce its debt of Rs3,900 crore.
An additional Rs250 crore is to be raised from the sale of the hospitality chain's land in Chennai.
The hospitality chain, with seven properties in its portfolio, will sell a 14.5-per cent stake, just below the mandatory open offer limit of 15 per cent, which would trigger a mandatory open offer for an additional 20-per cent stake acquisition by a potential buyer.
According to Hotel Leela venture's vice chairman and managing director, Vivek Nair, the company's shareholders had already approved the fund raising proposal.
Nair added that the company was looking at raising Rs600 crore through a preferential allotment in the next four months. Nair, however, declined to reveal the names of the private equity players that have evinced interest in the company.
In January 2010, a proposal to raise funds to the extent of Rs600 crore had received the board's approval.