Debt-laden five-star hotel chain Hotel Leelaventure might get some much-needed fund infusion from Canadian firm Brookfield Asset Management. As per media reports, Brookfield is in the final stages of buying at least four of the five luxury hotels and a land parcel owned by Leelaventure for 4,500 crore.
The deal is expected to close early next year and will mark Brookfield’s entry into the hospitality sector. The company has already made big-ticket investments in India’s commercial, office and residential segments and infrastructure projects.
When contacted, a spokesperson from Leelaventure did not comment on the development, only stating: “We have been evaluating many offers of many buyers to get the best deal. There is no binding contract with any investor as on date either for investment in the company or for the purchase of company’s assets”.
This is not the first time when the hospitality giant, which had a debt of 3,799 crore as of March 2018, has attracted the attention of investors. Last month, it was reported that a consortium including Thailand’s Minor International and Trinity White City Ventures plans to invest about 2,500 crore (or $350 million) in Hotel Leelaventure.
Hotel Leelaventure currently owns five luxury hotels in New Delhi, Bengaluru, Chennai, Mumbai and Udaipur and boasts more than 1,400 rooms under its badge. It also manages four other luxury properties in India under the Leela brand.
The potential deal with Brookfield comes at a time when most of India’s big hotel chains are increasingly adopting an asset-light model and selling real estate to either fund growth plans or trim debt. The model enables hotels to manage hotel properties under their brands while not owning the real estate.