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Hyatt Regency Mumbai owners defaulted on loan repayment before shutting operations

As per filings made to the stock exchanges, Asian Hotels (West) failed to repay the principal and interest of Rs 4.32 crore taken from Yes Bank as term loans. The defaults included a car loan EMI of Rs 400,000. Asian Hotels has a total debt of Rs 262.54 crore.

June 08, 2021 / 05:17 PM IST
 
 
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A week before Hyatt Regency, one of Mumbai’s popular five-star hotels near the airport, shut operations due to the non-payment of staff salaries, its owners had defaulted on bank loan repayments, including a car loan EMI. The hotel announced closure on June 7.

The luxury property, located less than a kilometre from the Mumbai International Airport, is owned by Delhi-based Asian Hotels (West), promoted by Sushil Kumar Gupta, who is the Chairman and Managing Director.

As per filings made to the stock exchanges, Asian Hotels (West) failed to repay the principal and interest of Rs 4.32 crore taken from Yes Bank as term loans. The defaults included a car loan EMI of Rs 400,000. Asian Hotels has a total debt of Rs 262.54 crore.

"In payment of interest/ repayment of principal amount of loan to Yes Bank, you may please note that the company defaulted Yes bank due installment on 28th April, 2021 (for the first time in its history) due to the massive effect of COVID -19 pandemic on the company, entire hotel industry across the country and globe," a clarification sent to BSE stated.

"Since then, Yes bank holds all funds including daily hotel collections in the escrow account and the company/hotel are not allowed to make any payment including government taxes (like GST, VAT, TDS, PF, ESIC, etc.), vendors payments, on roll employees' salaries (more than 300 hotel and corporate employees) and other critical hotel services from the said account. Yes Bank has only made some payments from Company's escrow account, towards the hotel's electricity, water and gas charges,", the clarification further added.

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Asian Hotels (West) owns one other property in India, which is the JW Marriott Aerocity, New Delhi.

The General Manager of the 401-room Hyatt Regency Mumbai, Hardip Marwah, released a short statement on June 7, stating that the owners of the property [Asian Hotels (West)] had not sent funds to either pay salaries or to support operations.

“As a consequence, the decision has been taken to temporarily suspend all operations for Hyatt Regency Mumbai with immediate effect. The hotel will remain closed until further notice,” Marwah said.

While several hotel properties across the country have closed operations temporarily and permanently over the last one year, this is the first time that a five-star property in the heart of the country’s financial capital has taken that route.

Due to lockdown restrictions in both the COVID-19 waves in the country, the hospitality industry claims to have suffered losses of nearly Rs 100,000 crore since March 2020.

The Hyatt Regency Mumbai shutdown news came on the same day when the Maharashtra government eased several restrictions as part of the unlocking, giving hope of a revival of the state’s economy.
Moneycontrol News
first published: Jun 8, 2021 12:44 pm

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