The debt-laden hospitality major Hotel Leelaventure Ltd has got a breather. The restructured repayment plan of the company has finally been accepted by the lenders. It has received a 24-month moratorium for the outstanding principal amount of Rs 3,000 crore it borrowed from a consortium of 17 banks.
It applied for corporate debt restructuring (CDR) in February 2012. At the September 12 CDR meeting held with the banks, Leelaventure was told to repay all its outstanding principal amount in eight years from January 2014. It also has to pool in all its hotel properties (other than the Bangalore hotel) as security against the loan amount from the CDR lenders.
The pooled securities include the company’s hotels in Mumbai, Goa, Udaipur, Delhi and Chennai.
As per the CDR package, Leelaventure has been given a 23-month moratorium for the interest portion too. The total interest, at 11 per cent per annum, will be converted into Funded Interest Term Loan (FITL) and need to be serviced from January 2014.
Besides, the company has agreed to sell its non-core assets and realise about Rs 620 crore. It will pursue an asset-light strategy for growth, by selling one of its existing hotels, taking it back on management contract and using the proceeds to cut debt, Vivek Nair, Vice-Chairman and Managing Director, Hotel Leelaventure Ltd, told Business Line .
As on date, the company’s total debt is Rs 4,300 crore. Besides the dues to the 17-bank consortium, it owes Rs 900 crore to HDFC and SBI Singapore (in the form of ECB). For the Rs 900-crore debt, which does not come under the CDR mechanism, the company has entered into a separate understanding with the lenders, said Krishna Deshika, Chief Financial Officer of the company. The Bangalore hotel is with these lenders as security. Hence, the loan will be serviced from the operating revenues of this property.