Viceroy Hotels 's total debt will get reduced to Rs 200 crore after selling the Chennai project division to Ceebros Hotels Private Ltd, said managing director P Prabhakar Reddy.
The value for the sale of the Chennai unit is Rs 480 crore and the entire transaction is expected to complete before June 30. Post this sale, the company has no plans of further sale of any property, he said.
"We are on the consolidation mode. We will be consolidating our Hyderabad operations, Bangalore and one or two other properties," he added.
Below is the verbatim transcript of P Reddy’s interview on CNBC-TV18
Q: Viceroy Hotels has agreed to sell its entire Chennai project division to Ceebros Hotels Private Limited for a sum of Rs 480 crore. When are you planning to see the fruition of this deal? When will it be completed? At what price has it been done?
A: The board has approved the sale of Chennai hotel division in favour of Ceebros Hotels Limited based in Chennai. The next step is taking the approval of the shareholders which is on. By June 19, the results should be out, we should get the approval of the shareholders. Before June 30, the whole transaction should get over and the entire debt pertaining to Chennai division will be taken care of by the purchaser.
Q: How much has this transaction been done for?
A: This is for Rs 480 crore.
Q: What is the total debt that the Chennai division is sitting on?
A: Total debt of Chennai division is around Rs 430 crore. So, Rs 430 crore of debt will go out of our books. Also the company will have cash surplus of around Rs 50 crore.
Q: Overall, what is the total debt of the company right now?
A: Post the sell of Chennai division, it will be around Rs 200 crore.
Q: Earlier you had completed the slump sale of your Bangalore property as well. How much did you get for that particular company?
A: It is a slump sale wherein Viceroy has interest in. Viceroy has not totally washed off its hands. Viceroy Hotels has 40 percent stake in the Bangalore division. The other 60 percent is held by JP Morgan.
Q: Are there any more land or properties that you are looking to sell?
A: Right now after the sale of Chennai our debt would be substantially reduced, so there is no need to further sell any property. Now, we are on the consolidation mode. We will be consolidating our Hyderabad operations, Bangalore and one or two other properties. We think of having budget hotels there. We also want to concentrate on F&B business which is our core strength and this is the way forward for the company.