Hotel Leela Venture Monday announced the sale of four hotels, including one in the national capital, and a property to Canadian investment fund Brookfield Asset Management for Rs 3,950 crore.
The company has 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 Bangalore, Chennai, Delhi and Udaipur and the property that it owns in Agra, Hotel Leela Venture said in a BSE filing.
The transaction includes assignment of all hotel management contracts currently in operation as well as all under-development, along with the employees of the hotels, it added.
"The total transaction value is Rs 3,950 crore plus the applicable transaction costs," the filing said.
Simultaneously, the promoters who own the Leela brand will also be transferring the Leela brand to Brookfield for all hospitality businesses, it added.
Proceeds of the sale "will be paid to the lenders of the company towards repayment of dues," the filing said.
"After completion of the aforesaid transaction, all borrowings of the company from all banks and financial institutions would stand repaid," it added.
Commenting on the development, Hotel Leela Venture Chairman and MD Vivek Nair said: "The Leela is rated amongst the top hospitality brands in the world and I am confident that the brand will receive a boost and be further strengthened and continue to be known for its world-class services".
Post-sale, the company will continue to operate the hotel in Mumbai and own certain land in Hyderabad and the joint development project of residential apartments with Prestige Developers in Bangalore, the filing said.
Brookfield will have a right of first refusal over the company's hotel in Mumbai, as a part of the transaction, it added.
"We are excited with this opportunity and look forward to completing this transaction at the earliest while ensuring that all operations remain unaffected. We expect the Leela hotels to continue to be market leaders," Brookfield Asset Management MD and Head-India Real Estate Ankur Gupta said.
JM Financial acted as the exclusive financial advisor to Hotel Leela Venture for this transaction, the filing said.
Shares of Hotel Leela Venture closed at Rs 11.08 per scrip on BSE, up 1.09 per cent from its previous close.