Hotel Leela spurts on asset sale plan

Hotel Leela is on a real run today and once again on the same old news – the company is seling assets to reduce debt. The stock has spurted up almost 8% currently at Rs.24 levels with some 70,000 shares changing hands.

The news, as we mentioned, is once again about its debt reduction. The company announced yesterday after market hours that it has engaged JM Financial Institutional Securities for sale of its Chennai and Goa Hotels. In accordance with the powers delegated by the company's Board, the Assets Sale Committee, in its meeting held on March 02, 2015 has decided to commence the process for sale of its hotels in Goa and Chennai. Accordingly, an advertisement is being released inviting interested parties to submit their EOI to JM Financial.

The company continues to sit on a debt of around Rs.4500 crore and as per the CDR plan, it needs to sell assets to bring down the debt. The last time it raised money by selling asset was way back in 2011 when it sold its luxury hotel in Kovalam, Kerala for Rs.500 crore. Hopefully, if it finds buyers for its Goa and Chennai properties, it could get back on the growth track, without debt pulling it down.