Finally, it’s done, the long-awaited deal of the marquee Leela Hotel in Goa has been the coup by the Indian Born London based businessman Raj Bagri, for whooping Rs. 725 Crore, according to the sources this is one of the major solitary property transaction in the hospitality sector in India with the second being the takeover of the “Park Hyatt Goa” by the ITC group for 515 Crore early this year. According to the sources as the ownership changes the hands from Nair’s Leelaventure to Raj Bagri’s Metdist, the former company will continue to manage the operations of this prime luxury property while retaining the brand name “Leela”.
Raj Bagri leads Metdist Group, which owns the metal assets in Malaysia and other parts of the world. Raj Bagri also owns the denim brand Spyker, which he had acquired last year. Based on the arrangement, the Metdist Group has created the local entity called “Ceres Hotels” that will acquire the Leela Goa property, which will mark the entry of Metdist Group into the hotel ownership in Asia’s third-largest economy. The deal will be subject to the approvals from all the regulatory authorities which are expected to be completed by the end of this year.
Raj Bagri, who is the first non-British chairman of the London Metal Exchange, also held the position of Conservative member of the House of Lords, is the Chairman of the low profile Metdist Group, which is managed by his son Anup Bagri, who has diversified interests in real estates and insurance businesses. The acquisition of Leela is the part of the real estate deal of the company. “This investment will show the Metdist Group’s confidence in building and growing businesses in India,” said Raghav Mittal, president and CEO of MetTube, the parent of Ceres Hotels.
The Leela is the biggest property in Goa which was built in 1991, touching to the beach, spread across the 50 acres and having 206 rooms is one of the top performing hotels in Goa, the country’s iconic party destination. According to the sources, the hotel contributed Rs. 119 crore, which is 15% of the total quantum of Leelaventures income of Rs. 762 crore.
The sale of the Goa property is the part of Leelaventure’s strategy to churn out the debt of Rs. 5000 crore, which is taken over by JM Finacial Assets Reconstruction, the asset management and reconstruction firm of financial conglomerate JM Financials, by investing the major chunk of around 4000 crores.
According to Nair the disinvestment plan of the Goa Hotel by retaining the management rights is the part of their business strategy to restructure the debt which will lead to manage more hotels, “The divestment of the Goa hotel and retaining the management of the hotel under the Leela brand is in line with our strategy to restructure our debt, follow an asset-light strategy and manage more hotels,” said Vivek Nair, CMD of Hotel Leelaventure.
In 2011, the company, in which India’s second largest hospitality chain ITC owns a stake, sold the Leela hotel, Kovalam, for Rs 500 crore to Saudi Arabia-based entrepreneur Ravi Pillai. Hotel Leelaventure is also exploring options to sell the 326-room Chennai hotel or bring in new investors at the corporate level as part of its debt restructuring plan. “We are working with JM Financial for a company-level solution and not unit by unit,” Nair said.
Source: Various Sources
Edited by Goa Prism News Desk