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2-min read

SEBI Restrains Cash-strapped Hotel Leela from Selling Properties to Brookfield

On March 18, Hotel Leelaventure Ltd had announced sale of its four hotels located in Bengaluru, Chennai, Delhi and Udaipur, as well as a property to Canadian investment fund Brookfield for Rs 3,950 crore.

PTI

Updated:April 24, 2019, 2:29 PM IST
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SEBI Restrains Cash-strapped Hotel Leela from Selling Properties to Brookfield
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New Delhi: Cash-strapped Hotel Leelaventure Wednesday said capital markets regulator Sebi has barred it from selling its four hotels and other assets to Canadian investment fund Brookfield Asset Management till further directions.

On March 18, Hotel Leelaventure Ltd (HLVL) had announced sale of its four hotels located in Bengaluru, Chennai, Delhi and Udaipur, as well as a property to Canadian investment fund Brookfield for Rs 3,950 crore. It had sought shareholders approval and voting is scheduled to end on April 24.

The Securities and Exchange Board of India (Sebi) in its letter to Hotel Leelaventure said it has received representations from ITC, which has also moved the National Company Law Tribunal against Hotel Leelaventure alleging "oppression and mismanagement", and minority shareholder Life Insurance Corporation (LIC).

Diversified group ITC has made certain alllegations against HLVL, its promoters and JM Finanacial Asset Reconstruction Company Ltd with respect to postal ballot notice seeking shareholders nod for the sale, the letter said.

"...While representations are being examined by Sebi, in view of paucity of time involved and in the interest of investors in securities, you are advised to ensure that none of the transactions proposed in the postal ballot notice dated March 18 are acted upon till further directions from Sebi," Hotel Leelaventure said in regulatory filing.

ITC had on Tuesday moved the Mumbai bench of National Company Law Tribunal (NCLT) against Hotel Leelaventure alleging oppression and mismanagement.

ITC, along with the petition, had also filed two applications seeking urgent hearing and waiver of the requirement of minimum threshold of 10 per cent shareholding.

As per the latest information available on bourses, ITC holds a total of 7.92 per cent stake in Hotel Leelaventure Ltd (HLVL).

LIC of India Future plus Growth Fund hold 2.36 per cent stake in the company.

On March 18, Hotel Leelaventure had entered into a binding agreement with a Brookfield Asset Management sponsored private real estate fund to sell, by way of slump sale, four owned Leela hotels located at Bengaluru, Chennai, Delhi and Udaipur and the property that it owns in Agra.

The transaction included assignment of all hotel management contracts currently in operation as well as all under-development, along with the employees of the hotels, it added.

Proceeds of the sale "will be paid to the lenders of the company towards repayment of dues," the filing on March 18, had said.

"After completion of the aforesaid transaction, all borrowing of the company from all banks and financial institutions would stand repaid," it had added.

Shares of Hotel Leelaventure were trading at Rs 10.63 per scrip on BSE, 1.14 per cent up from its previous close.

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