Brookfield Asset Management Inc. of Canada has completed its purchase of Hotel Leelaventure Ltd's luxury hotels to mark its entrance into the Indian hospitality industry with a brand competing with the likes of Indian Hotel Co. Taj Hotels, Ltd. and Oberoi Hotels, EIH Ltd. The hotel chain based in Mumbai has sold four of its hotels in New Delhi, Bengaluru, Chennai and Udaipur together with a parcel of land in Agra. The deal, which was first announced in March, excludes its fifth property in Mumbai and a parcel of land in Hyderabad. The hospitality company said it obtained Rs 3,950 crore ($556.9 million) on October 16 from Brookfield for the offer to repay its loans to banks and financial institutions. The promoters and promoter group companies have completed the sale of the Leela brand and trademarks to Brookfield for Rs 150 crore in the hotel and hospitality market. Leelaventure also announced the resignation of its President Rajiv Kaul and Chief Financial Officer Rajan Shah following the agreement. Umesh Dombe has been appointed Chief Financial Officer by the company with effect from October 23, it said. The announcement comes almost a month after an appeal by ITC Ltd, which owns a 7.92 percent stake in Hotel Leelaventure, was dismissed by the Securities Appellate Tribunal (SAT), challenging the sale of Leelaventure's assets to Brookfield. Before SAT, ITC challenged the deal before the Securities and Exchange Board of India (SEBI), citing Leelaventure, its promoters, and 26 percent shareholder JM Financial Asset Reconstruction Company's oppression of minority shareholders and corporate governance issues. It had also approached the bankruptcy court asking for a waiver of the requirement to hold no less than one-tenth of the company's issued share capital. The ITC's petition for waiver is pending before the court. The Bombay High Court has also dismissed an appeal filed by Airports Authority of India (AAI) that challenged the deal with Brookfield.
Brookfield had been in talks with the promoter Nair family of Hotel Leelaventure to purchase the four luxury hotels. In addition to Brookfield, there was also reportedly a consortium of investors including Blackrock, SSG Capital and RB Capital in the hotel chain's acquisition fray. It was reported that Rashid Al Habtoor, a billionaire based in Dubai had bid Rs.4,200 crore for the hotel chain, real estate and infrastructure sectors of India. Overall, the company has so far plowed nearly $2.5 billion into India's commercial real estate market. The investor is currently developing 4 to 5 million square feet of commercial properties in India, including Mumbai's Waterstones hotel and about 1.5 million square feet of an office park in Pune. A report on Monday indicated that Brookfield looks to buy Sri Chaitanya school chain from its promoters and New Silk Route private equity firm.
