Bangalore-based Royal Orchid Hotels Ltd, which owns and operates midscale and upper midscale hotels and resorts, plans to sell its Hyderabad property Re:gen:ta One, the company informed stock exchanges. The firm has sought shareholder approval for the sale.
The hospitality firm could be selling off its Hyderabad property to decrease the debt it has accumulated till now. It had total debt of around Rs 166 crore as of March 31, 2013.
The company has been following a strategy to sell assets for reducing debt and focus on management contracts instead of owning the property. Last year, it sold a hotel in Ahmedabad to PE-controlled Samhi Hotels for Rs 67 crore.
Back then, chairman and managing director of the company Chander K. Baljee had told reporters, “We have sold the property in order to reduce debt. The deal is part of a restructuring plan wherein we will focus more on management contracts than ownership.”
Apart from Royal Orchid, many other hotel owner-operator companies have been selling assets to reduce debt. Earlier, luxury hotel chain Leela Group sold its IT Park building in Chennai to Reliance Industries for Rs 170 crore. In 2011, the company sold its resort property in Kovalam for Rs 500 crore to NRI businessman Ravi Pillai while retaining management rights to the hotel.
Royal Orchid, founded in 1986 by Baljee, operates 23 business and leisure hotels. The company’s brands include Hotel Royal Orchid (five star), Royal Orchid Central (mid-market) and Royal Orchid Suites and Resorts.
(Edited by Joby Puthuparampil Johnson)