News Source: bwhotelier.businessworld.in
Hotel Leelaventure Limited Completes Its Sale Transaction with Brookfield
News Source/Courtesy: bwhotelier.businessworld.in

Courtesy/News Source: bwhotelier.businessworld.in

HOTEL LEELA VENTURE Limited (HLVL) has completed the transaction with BSREP III India Ballet Pte. Ltd. / its affiliates (“Brookfield”) for sale of the Company’s hotel undertakings in Delhi, Bengaluru, Chennai and Udaipur, hotel operations business, and 100% shareholding in Leela Palaces and Resorts Limited (its wholly-owned subsidiary) which owns property and holds licenses for the development of a hotel in Agra (collectively “Undertakings”). A few procedural formalities are pending and would be completed shortly.

The total consideration of Rs. 3950 crores were received from Brookfield on 16th October 2019 and the entire consideration, net of transaction-related costs of Rs. 70 crores were used to repay the banks and financial institutions who were lenders to the Company, in full and final settlement, as One-time settlement. The lenders have issued release letters to the Company whereby they have confirmed that there are no further dues payable by the Company and have thereby released all the security interest created in that regard including security on assets which are not part of the sale of Undertakings to Brookfield.

The Promoters / Promoter Group Companies have also completed the transfer of the Leela brand and trademarks in the hotels and hospitality space to Brookfield and have received the consideration of Rs. 150 crores. The Personal Guarantees and Corporate Guarantees issued by them for HLVL’s debt in favour of HLVL’s lenders have also been released by the lenders.

The Company has transferred all the employees of the Hotel Undertakings in Delhi, Bengaluru, Chennai and Udaipur, and the identified employees in the Corporate Office, to Brookfield.

The Company will continue to own and operate the hotel in Mumbai, under the Leela Brand licensed to it by Brookfield. The Company also continues to own the land in Hyderabad and its share of apartments under the joint development project of residential apartments with Prestige Developers in Bangalore, adjoining The Leela Palace Hotel.

The Securities Appellate Tribunal (SAT) had passed an order on 26th September 2019 dismissing ITC’s appeal against the order of SEBI. ITC Limited has filed a Statutory Appeal (being Civil Appeal No 8045 of 2019) before the Supreme Court against the order of SAT, but the same has not come up for hearing.

ITC’s petition before the NCLT under Section 241 of the Companies Act (Act) is pending before the NCLT for their judgment on the Waiver Application filed by ITC for waiver of the requirement to hold not less than one-tenth of the issued share capital of the Company as required under Section 244 of the Act.

As Brookfield has now acquired the Undertakings in accordance with the Orders of SEBI and SAT, HLVL hopes that ITC Limited, who are a minority shareholder and a competitor stops further litigation.

Airports Authority of India (AAI) had filed an appeal against the City Civil Court’s order before the Bombay High Court challenging the transaction with Brookfield. The High Court has dismissed the appeal. However, the dispute with AAI continues.

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News Source: bwhotelier.businessworld.in

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