Five star hotel chain Hotel Leela venture is set to sell its property in Kovalam In Kerala for Rs 500 crore to cut its debt, a newspaper said on Thursday.
The property, Leela Resorts Kovalam, is being sold to non-resident Indian industrialist Ravi Pillai, the paper said, adding Leela will subsequently enter into a management contract with Pillai to manage the property for 30 years.
The paper said Hotel Leela has a debt of Rs 3,830 crore at the end of FY11 and has an ongoing capital expenditure plan of more than Rs 4,000.
In April, the firm had launched a 260-room property in Delhi, and plans to open one in Chennai later this year.
In March, the hotel chain had said it plans to raise Rs 950 crore by selling and developing land for residential purposes. The plan includes sale of a commercial park in Chennai.
The company had last month executed a joint venture with Prestige Estate Projects to develop premium apartments on part of its land bank in Bangalore. Hotel Leela expects to generate about Rs 150 crore over 4 years through this development.