The moment Hotel Leela opened for trading today morning, it was locked at the 5% UC at Rs.11.63; ironically, yesterday, it had hit the 5% LC at Rs.10.42.
The company is selling all assets and liabilities of the hotels located at (a) Bangalore, (b) Chennai, (c) Delhi and (d) Udaipur, on a slump sale basis as a going concern, including the Company’s rights in the hotels, and underlying immovable properties to Brookfield Asset Management company . It is also selling; 100% shareholding of the Company in Leela Palaces and Resorts Limited which owns property and holds licenses for the development of a hotel in Agra.
The transaction also includes all assets and liabilities related to the properties, all hotel management contracts currently in operation, contracts for hotels currently under development, all intellectual property owned by the company and the promoter.
The only hotel it is now left with is the Mumbai property and for this, it will sign a licence agreement and centralised services agreement with Brookfield, which will have a right of first refusal over the Mumbai hotel, in case that’s ever put up for sale.
For all this, Hotel Leela will receive Rs.3950 crore from Brookfield, which will gon in entirety to clear its debt of Rs.3800 crore.
Hotel Leela will now be left with the Mumbai property and some land it owns in Hyderabad and the JV it has signed with Prestige Developers for development of residential properties in Bangalore.