Luxury hospitality player Hotel Leelaventure Ltd’s proposed deal to raise a bridge loan from an arm of private equity giant Kohlberg Kravis Roberts (KKR) has fallen through as the company did not agree to terms offered by the PE major, it announced in stock exchange today.
“As the terms could not be finalized to satisfaction of the company, KKR and CDR Lenders, it was communicated by KKR in the meeting of the CDR Lenders held on May 20, 2014 that they would not be providing the bridge loan to the company,” the company said.
The development comes in the wake of difficult times for the company. Earlier this month, its 92-year old founder Captain Krishnan Nair passed away after a brief illness.
The shares of the company were trading at Rs 25.35 a unit, up over 7 per cent at 2.30PM on the BSE in a weak Mumbai market on Wednesday.
Earlier in March, Hotel Leelaventure had said that its board has asked top executives of the company to renegotiate on-going sale of assets and a proposed bridge loan from an unnamed lender. It had said the indicative term sheets for a bridge loan do not meet the company’s requirements.
The company is looking to raise this loan to meet its debt service obligations.
Leela Group has been reeling under debt of Rs 4,700 crore which it raised from a consortium led by State Bank of India. The company has been selling assets to generate liquidity and reduce its debt. Earlier, Leela sold its IT park in Chennai for Rs 170 crore to Reliance Industries and its property in Kovalam to Ravi Pillai for Rs 500 crore. The group also has plans to sell a 3.84-acre piece of land in Hyderabad this year.
While the firm had not named KKR as the prospective lender, according to media reports it was in talks with global buyout firm to raise debt of as much as Rs 2,000 crore against two of its properties.
Separate reports have earlier also mentioned that the public-listed company had been in talks with sovereign funds of Abu Dhabi, Qatar and Malaysia to raise resources by selling its assets.
KKR which has been credited largely as leverage buy out (LBO) player, is looking at expanding its money-lending activities in India.