JM Financial files application with NCLT against Hotel Leela Venture

Mumbai: Hotel Leela Venture said on Tuesday that JM Financial has filed an application with the National Company Law Tribunal's Mumbai Bench against Hotel Leela Venture Limited.

The application has been filed under Section 7 of the Insolvency and Bankruptcy Code 2016.

With a hotels portfolio spanning across Delhi, Chennai, Udaipur, Gurugram and Bengaluru, the chain’s debt exceeds Rs 3,000 crore.

"We further wish to inform you that the company is continuing to engage with prospective investors for a resolution," Hotel Leela Venture said in a press note to the exchanges.

In June last year, Hotel Leela Venture’s board approved the enabling provision to issue up to 125 crore equity shares in one or more tranches to JM Financial Asset Reconstruction Company (JMFARC), which currently holds most of its debt.

The potential share issue could have hiked the JMARC’s stake in Leela Venture to 75 per cent from the current 26 per cent but the proposal was not approved during the company’s annual general meeting held on August 20.

However, reports say Canadian private equity major Brookfield Asset Management has finalised the terms and conditions to acquire Hotel Leela Venture with JMARC for about Rs 4,500 crore.