Hotel Leelaventure Ltd (HLL) will raise to the tune of Rs 1,000 crore. The company board met on Monday (May 23, 2011) to review the progress of equity raising plans. Approval from shareholders will be sought in the coming weeks for this fund raising exercise.
While company officials are tight-lipped, a senior management personnel had earlier stated that the company is looking to raise money by issuing fresh shares of around 14.95% to 'prospective investors' to help cut debt and lower interest costs. In this regard, the company management is believed to have initiated discussion with top global private equity firms operating in India. Industry sources also said that names like Blackstone, KKR, Carlyle and TPG are among the leading PE players being spoken to for the potential capital infusion.
The luxury hotel operator also announced its results for FY'11 wherein its earning before interest, tax, depreciation and amortisation (ebitda) increased by 19% from Rs 153.45 crore last year to Rs 182.63 crore in 2010-11. However, owing to higher interest burden, its consolidated net profit declined 7.84% to Rs 37.84 crores in FY'11 as against Rs 41.02 crore last year. The company's consolidated net sales for the three months period ended March 31, 2011 increased 17.05% at Rs 525.82 crore as against Rs 449.19 crore in the same quarter last fiscal.
Commenting on the performance of the company, CP Krishnan Nair, chairman, Hotel Leelaventure Ltd, said, "With the improved performance of existing hotels and addition of New Delhi hotel, the company's revenue and ebitda is expected to go up by about 45% in the current fiscal."