Kamat Hotels aims to divest four land parcels

Kamat Hotels India Ltd (KHIL) is planning to divest land parcels earmarked for hotel developments whereby the money raised will be used to decrease the company’s debt. KHIL was in talks with a host of hotel companies and realtors for the land parcels.

“We have decided to divest the hotel sites in Coimbatore, Amravati, Raipur and Nagpur. The land parcels are of sizes ranging from 2-40 acres. The real estate has been sitting on the company’s balance sheet for about 4-5 years now,” said Kurian Chandy, Chief Financial Officer.

KHIL has also deferred its plans for a hotel in Baddi (Himachal Pradesh), citing regulatory issues. Also to reduce debt, the company has mooted a proposal to convert FCCBs of $18-million raised in 2007. An extraordinary general meeting is scheduled on June 10, for resetting the conversion price.

Chandy said, “Converting the FCCBs will help us reduce debt by around Rs85-crore, thereby increasing net worth. Currently we have a net worth of Rs165-crore as against a debt of Rs407-crore. Once the FCCB is converted, the net worth will increase to Rs250-crore against a debt of Rs320-crore. The debt burden will be further reduced by using the sales proceeds from divestment of the land parcels.”