“The company has defaulted in payment of quarterly interest of Rs 212.67 lakhs, which was due on 19 September, 2018,” it said in a statement.
Leela had raised debt of Rs 90 cr from LIC of India ten years ago by issuing debt securities. With the latest miss, the total interest outstanding has climbed to Rs 13.80 cr, the company said.
The principal redemption amount outstanding is Rs 45 cr.
The hotel chain never really recovered from the 2008 financial crisis, coming as it did on the heels of heavy investments by the group in debt-fueled expansion.
The company has already sold some of its marquee properties, but has been successful in signing management contracts after the sale, thus maintaining the brand.
It has also sold many of its land holdings that were supposed to help it expand in the future. There have also been rumors for several years that it would sell its biggest hotels, one in Chennai and another in Delhi, for around Rs 3,000 cr.
On its part, the company has indicated that it will prefer an asset-light model going forward.
In its latest statement, Hotel Leelaventure said its cash flows are not enough to service the loans and it’s looking at other options.
“..the funds of the company are escrowed with its lenders and the inflows and outflows are also monitored by the lenders.
“The company is evaluating various options for a viable restructuring, including sale/monetization of non-core assets, sale of hotels, equity infusion and debt refinancing by investors etc.”