Wed, 18 Apr 2012 09:36:42 GMT

Viceroy Hotels to exit Chennai project

Hyderabad: Viceroy Hotels Ltd has decided to sell its Chennai hotel project. It has signed an agreement with the Chennai-based Mahal Hotels to sell the project in MRC Nagar. This hotel was to be managed by global chain JW Marriott.

Viceroy Hotels to exit Chennai project

This marquee project, which the Hyderabad-based hospitality chain, had taken up with an outlay of about Rs 650 crore, was under advanced stage of implementation. The company has been seeking to restructure its business operations bringing down debt on its balance sheet. It had initiated a series of measures, including slump sale of Bangalore and Chennai properties.

"We have finalised the deal with Mahal Hotels and decided to exit the Chennai project. This move will help us reduce the debt by Rs 400 crore. Then we will have a light balance sheet with a debt of about Rs 200 crore," Mr P. Prabhakar Reddy, Chairman and Managing Director, Viceroy Hotels, said.

Speaking to Business Line, Mr Reddy said, "This move would help the company focus on the existing projects and thereafter enable us to take up new projects. The debt had become a major issue. Therefore, we decided to exit the Chennai project and focus on projects we currently manage while executing the 21-storey Bangalore Renaissance venture."

"Likewise, we had brought in investments by JP Morgan in the Bangalore project. This project is being co-developed by Viceroy. The company promoters hold about 32 per cent stake. We had pledged some shares with lenders and recently resumed them after retiring the existing debt," he explained.
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