Financial Daily from THE HINDU group of publications
Friday, Jul 22, 2005
Mergers & Acquisitions
Leela group takes over Kovalam hotel; to spare Halcyon Castle
Thiruvananthapuram , July 21
THE Mumbai-based Hotel Leela Venture Ltd has announced the launch of The Leela Kovalam Beach, its first hotel in Kerala, following the takeover of Kovalam Hotels Ltd.
Speaking to newspersons, Mr C.P. Krishnan Nair, Chairman, said: "I always wanted to own a hotel in Kerala. The idea is to develop The Leela Kovalam Beach into a seven-star property."
The 194-room hotel was set up by India Tourism Development Corporation in the late 60s. It was sold to Kovalam Hotels Ltd, a subsidiary of MFar Hotels, three years ago as part of the divestment process.
Mr Venu Krishnan, Executive Director, said that Hotel Leela Venture acquired Kovalam Hotels Ltd for Rs 58 crore.
In addition, Hotel Leela Venture has taken over the debt of approximately Rs 55 crore incurred by Kovalam Hotels while renovating the property, he added.
Hotel Leela Venture will invest approximately Rs 20 crore in refurbishing the hotel and adding to its facilities, he said. The process is likely to be completed by December, he added.
On the dispute between the State Government and Kovalam Hotels over the ownership of Halcyon Castle, which is located on the resort's grounds, Mr Nair said that the castle should be preserved as a heritage building.
"Hotel Leela Venture is willing to work with the State Government to ensure that Halcyon Castle is maintained as a heritage property."
His company will not go in for any litigation regarding ownership of Halcyon Castle, he added.
Hotel Leela Venture is also looking at starting a hotel in Kumarakom, he said.
The company is currently evaluating several possible sites in the area.
Similarly, the company is still looking at setting up a resort at Bekal in Kasaragod district, Mr Nair said. Refuting reports that the company has lost interest in the Bekal initiative, he said that the company is committed to having a hotel there.
"However, access to Bekal is a problem. But even this issue can be solved if an airport is built in Kannur district."
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