Hotel Leelaventure Ltd intends to sell its property in Kerala, The Leela Kovalam, to Travancore Enterprises Private Ltd (TEPL). To this end, Hotel Leelaventure recently signed a Memorandum of Understanding (MoU) with TEPL to transfer its Kovalam hotel undertaking to a Special Purpose Vehicle (SPV), which will be acquired by TEPL for a sum of Rs 500 crore. However, Hotel Leelaventure will continue to manage the hotel under 'The Leela' brand through a long-term management contract to be finalised with the SPV.
According to a company release, the MoU is a result of Hotel Leelaventure's Board of Directors' decision to pursue an 'Asset Light Strategy' to reduce its debt. The company is also actively reviewing proposals for management contracts in other parts of the country.