Hotel Leelaventure soars 6% as US PR firm looks to buy group's Chennai hotel

NEW DELHI: Shares of Hotel Leelaventure shot up over 6 per cent on Friday the ET reported that American private equity fund Marigold Capital and Investments will buy Leela Group’s 326-room hotel in Chennai for around Rs 700 crore, two people with direct knowledge of the development said.

The deal with the fund, which specialises in buying debt-ridden hotels and commercial real estate properties and turning them around, is in the documentation stage where the final agreement will be drafted a person with direct knowledge of the matter informed ET.

Following the report, the scrip jumped 6.44 per cent to hit a high of Rs 23.95, eventually closing at Rs 23.10, up 2.67 per cent on BSE.

A Leela spokesperson did not respond to an emailed questionnaire. Marigold did not respond to a questionnaire mailed to an address sourced from its website.

The group, which built its first property on a leased land from the Airports Authority of India (AAI) in Mumbai, was unable to raise about Rs 2,400 crore in 2014, despite selling some of its properties as part of meeting the corporate debt restructuring (CDR) programme by lenders, the ET report noted.

Once the CDR failed, lenders decided to sell the loans to Asset Reconstruction Companies (ARCs).