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Tunia Cherian George

Mumbai , May 7

HOTEL Leelaventure Ltd, which has recently announced plans for the development of hotels in Chennai, Hyderabad and Udaipur, is likely to acquire a five-star deluxe property in the South shortly.

According to an official source, the deal is nearly through and the company had to merely complete formalities on the same. This would be the first acquisition of an existing property by the hotel company, which has so far developed all its properties from scratch, the source said.

Without stating where the hotel is located, he said the property, with more than 200 rooms, could be improved to their "high" standards with a little bit of renovation work.

The acquisition is likely to be completed in three months time, and the property would operate under the Leela brand before the next season begins in September-October, he said.

Commenting on the decision to acquire an existing property, he said though the company had so far stuck to developing properties on its own, the acquisition route is a cheaper option that should not be closed. The cost of setting up a room in a new development is about Rs 1 crore.

The company is in the process of raising about Rs 350 crore through the FCCB route to finance the new developments as well as the new acquisition. The structured funding would be at minimum cost to the company and would not expand the company's capital base, currently at Rs 73 crore. The dilution in the earnings per share would, therefore, be minimum, thereby benefiting the shareholders, he said.

The company is likely to raise Rs 900 crore over the next three years for its expansion plans.

Hotel Leelaventure, which has three hotels operational at Mumbai, Bangalore and Goa, recorded a net profit of Rs 44.24 crore and a turnover of Rs 270 crore in the year ended March 2005.

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Hotel Leelaventure may acquire property in South

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