Hotel Leela checks out without paying!

about 6 months ago
No Image

Hotel Leelaventure announced just some 30 minutes ago that it has defaulted in the payment of quarterly interest on debentures due on 19th June’18.

The company had issued Secured Redeemable Non-convertible Debentures on Private Placement Basis aggregating to Rs.90 crores to LIC of India in December, 2008.

It has now defaulted in payment of quarterly interest of Rs. 2.13 crore, which was due on 19th June, 2018. 

The total interest outstanding as on date is Rs.12.14 crore and principal redemption amount outstanding as on date is Rs.45 crore.

The company has stated that its operating cash flows are not sufficient to service its term loans and NCDs and the funds of the company are escrowed with its lenders and are also monitored by the lenders. The Company is pursuing with the lenders for Debt restructuring.

Ten days ago, the Board of Leela, approved a plan to transfer a majority stake to JM Financial Asset Reconstruction Co. Ltd by converting a part of debt to equity.

JM Financial ARC’s stake in the luxury-hotel chain will rise to about 75% when the transaction is completed from 26% at the end of March.

The Leela Group was founded by late Captain Krishnan Nair in 1987 and has been reeling under debt of over Rs 3,000 crore that it had raised from a consortium of 15 lenders led by State Bank of India. In 2014, a majority of lenders sold their loans to JM Financial ARC.

The stock price fell over 6% to Rs.16.80, just 30 paise short of its 52-week low of Rs.16.50.

Popular Comments