Viceroy Hotels (VHL) has announced intentions to cut loose its INR560 crore Chennai project division in order to reduce debt on the company balance sheet. “Hiving off of the Chennai project division will help reduce debt from the books of VHL. The company is building a luxury hotel property in Chennai, which has a total debt of around INR450 crore,” VHL Company Secretary P Lenin Babu told PTI. In a statement filed with the Bombay Stock Exchange, Viceroy said the issue would be tabled for detailed consideration at a Board Meeting on Saturday. Viceroy’s Chennai property has been beset by setbacks. Construction of the 387-room hotel began in 2005, but escalating costs and lack of funding delayed progress and operations are now expected to begin in two or three years time.
By hiving off the costly project into a separate company, it is hoped that the parent company will be better positioned to raise funds to complete the project. Shareholders have already approved an identical move for the Bangalore Project Division.
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