Leela Scions to Focus on Restoring Financial Health
Late Capt Krishnan Nair’s sons — Vivek and Dinesh — are in talks to sell assets
With the death of Captain Krishnan Nair, the founder and chairman emeritus of Hotel LeelaVenture, the onus will be on sons Vivek and Dinesh to restore the hotel chain’s financial stability and keep suitors such as ITC at bay. Vivek, chairman and managing director, and Dinesh, co-chairman and managing director, are currently in the midst of negotiating a sale of assets and a bridge loan for meeting the company’s requirements. In a statement last month, the company had confirmed that it was trying to offload assets, which may include the Delhi and Chennai properties, to pare debt, pegged at .` 4,700 crore. The hotel chain last paid a dividend to shareholders in 2011.
ITC holds a significant 12% stake in the hotel chain through investment companies. The promoters have a 62% stake, but over 90% of it is pledged against loans.
Their predicament is similar to that of the Oberois of EIH some years ago. They eventually roped in Mukesh Ambani of Reliance Industries as a white knight to act as a buffer against ITC. Will Leela need a white knight? At the time of the launch of the New Delhi property in 2011, Capt Nair had said that he would enlist the help of Ambani in case he felt threatened by predators.
In a later conversation, Capt Nair said son Vivek had actually written an email to Ambani apologising for the uninvited offer. Ambani had said the senior Nair’s wish would be his command.
Captain Nair said Vivek possessed good networking skills, while younger son Dinesh was the operations man. Both talents will be required in abundance in the coming days for the hotel chain to avoid a debt trap.