13 August 2019: While declaring its results for the quarter ended June, Hotel Leelaventure said it was seeking fresh approval of the shareholders by postal ballot for its sale of assets to Brookfield. Leelaventure said voting will begin on August 18 and will end on September 16. The company said it will declare the results of the postal ballot September 18.
Last month, Sebi had asked Hotel Leelaventure to put to vote afresh the asset sale transaction of the company before the shareholders besides providing additional disclosures in its postal ballot notice for asset sales to Brookfield like details of valuation of both the asset sale transaction and additional intellectual property transaction including the methods adopted by the company.
Tobacco-to-hotels conglomerate ITC had challenged the transaction in the dedicated bankruptcy court, National Company Law Tribunal (NCLT) in April, claiming mismanagement and oppression of minority shareholders and had also complained to Sebi.
In March this year, Leela Venture announced that Canadian alternative asset management company Brookfield had agreed to purchase its key hotel properties in Delhi, Bengaluru, Udaipur and Chennai for Rs 3,950 crore.
The company reported a loss of Rs 7.52 crore for the quarter under review, compared to a loss of Rs 66.69 crore in the corresponding period of the previous fiscal.
Leelaventure reported a total income of Rs 329.4 crore down from Rs 359.5 crore in quarter ended June 30, 2018.
Referring to the proposed asset sale to Brookfield, the company’s auditors said if the interest and other finance costs notified by the asset reconstruction companies were provided in the books of accounts, the loss for the quarter would have been higher by Rs 234 crore. The auditors also said relating to enhancement in rentals, unilateral termination of lease of the Mumbai hotel and initiated eviction proceedings which the company is legally contesting, the disputed amount not provided in the books for the quarter ended June 30 was Rs 3.52 crore. The notes further added that related to the demands made by Airports Authority of India relating to rent, minimum guarantee fee in respect of the lease of 11,000 square meters of land in Mumbai cumulatively amounting to Rs 807 crore upto January 31, 2019 is not provided as the liability is disputed and not crystalised as per the legal opinion.