Viceroy Hotels Ltd (VHL) is set to conclude the transaction to sell its Chennai project by December end.
The Rs 500-crore transaction is to sell both hotel and residential projects.
Chairman and managing director P Prabhakar Reddy said in company's annual report they had divested the Chennai project division comprising Chennai Hotel Project and Chennai Residential Project to Mahal Hotel Private Limited and Esteem Housing Developers Private Limited respectively, on slump sale basis.
“The transaction would be around Rs 500 crore and will be completed by December,” said Reddy. The money would be used to reduce the company's debt burden and to support projects in Hyderabad and Bangalore.
Earlier, the company told its shareholders, the sale would not only result in reduction of debt to the tune of Rs 450 crore, but would also give Rs 100 crore of inflows into the company. The Chennai hotel property will have a total of 387 rooms, construction work on which started in 2005 at an initial cost of Rs 490 crore.
The project was delayed, due lack of funds and regulatory issues, which was later sorted out. “We did not have any big regulatory issue or problem, a few last minute approvals are pending, which is usual. We also got NOC for the transfer of the business,” said Reddy.
The company has already got approval to hive-off its 'Bangalore Project Division' for a consideration of Rs 205 crore. VHL operates two hotel properties in Hyderabad under the Marriott and Courtyard brand. The Chennai project will also be managed by Marriott, after the sale.