Leela Group mulls Infopark property exit

KOCHI: The Leela Group (Leelaventure) is looking at deleveraging its debt books further by exiting its assets at Infopark, a tech park located in suburban Kakkanad near Kochi, according to industry sources.
The luxury hotel chain is understood to be in preliminary stages of scouting for a buyer for its 'Leela Infopark' property once it completes the required due diligence procedures."Leelaventure has been keen to exit its non-core assets. The Kovalam property was sold for Rs 500 crore last year. For the Infopark properties, they are in preliminary stages of chalking out a strategic divestment plan," sources said, saying that it was premature to cite a value for the assets at this stage.
Leelaventure operates its Leela Infopark properties out of Infopark in Kochi and the Technopark in Thiruvananthapuram. The Kochi operations of Leela Infopark have been built out over three phases/units and currently house a number of technology products and services companies. The group developed the IT infrastructure with SEZ (Special Economic Zone) status in three phases at Infopark since 2004, totalling a super built-up area of almost 5 lakh sq ft. Phase I was completed in 2004 and is spread over 127,000 sq ft, while Phase II was completed in 2009 and is spread over 330,000 sq ft. The proposed exit from the Infopark operations is part of the ongoing exercise to ease the company's debt burden of over Rs 3,000 crore, according to investment bankers. Leelaventure is said to be looking at deleveraging at least Rs 1,000 crore worth of non-core assets in the short to medium term.
Leelaventure's debt stood at Rs 3,830 crore at the end of fiscal 2011 which it aims to bring down to Rs 1,000 crore over the next four years.
The Qatar Investment Authority, a sovereign wealth fund, and private equity giant Blackstone are among those said to have evinced interest in the properties in Kerala and other locations.
Till date, Leelaventure has invested almost Rs 200 crore in setting up IT infrastructure in Kochi and Thiruvananthapuram. Leelaventure subsidiary Leela Soft is a co-developer at Infopark, along with others like L&T Techpark and Brigade Enterprises. A Leela Group spokesperson did not respond to questions seeking comments on the development. When contacted, Infopark CEO Gigo Joseph denied any knowledge of the matter.
In August last year, the group had sold its Kovalam property Leela Resorts Kovalam for Rs 500 crore to Saudi-based petrochemical tycoon Ravi Pillai. However, Leela has not exited the property completely and will enter into a management contract with Pillai to manage the property for 30 years.