Hospitality chain Viceroy Hotels Ltd is in the process of restructuring its business operations, including ‘slump sale' of its Bangalore arm and outright sale of its Chennai special purpose vehicle.
The Managing Director of Viceroy Hotels Ltd, Mr P. Prabhakar Reddy, told Business Line that the company has decided to exit the Chennai property and expects to complete the process during the current quarter of the financial year.
“The move to restructure business and divest stake in the Bangalore project and exit from Chennai property is to reduce the company debt and thereafter, go ahead with lighter balance sheet. The sale will help bring down the total debt of Rs 550 crore,” he explained.
387-room property
The Chennai property with 387 rooms is one of the major hospitality projects in the country with an outlay of about Rs 780 crore. This is expected to be completed by early next year with additional investment of about Rs 200 crore more. Thus far the company has invested about Rs 550 crore on the project, which includes Rs 150 crore equity and Rs 400 crore debt.
“We are in talks with some potential suitors. But prefer not to disclose any details at this point of time. We are confident of closing the transactions by September,” he said.
Mr. Reddy said “after the hiving off of the Chennai property and divestment in the Bangalore property by roping in JP Morgan Fund as strategic investor, Viceroy Hotels will have 600 rooms on its won. We plan to take this up to 1,000 rooms by 2013, including new projects at Visakhapatnam.”