The securitization and reconstruction firm JM Financial Asset Reconstruction Co. has reportedly been planning lately to acquire majority stakes by converting a part of the debt to equity in the popular Leelaventure Ltd. According to the reports, Leelaventure’s board has approved an enabling resolution and the deal has been confirmed on Monday.
Earlier the investment firm had a stake of 26% in the holding company Mumbai-based hotel chain, but after the completion of the deal JM financial will hit the stake percentage of 75% that is the majority stake in the firm.
The board of the holding firm has given its consent for issuing up to 125 crore equity shares with the face value of Rs 2 each in one or more tranches to JM financial.
JM Financial Asset Reconstruction Company Limited is the leading Indian investment banking firm which is registered with the Reserve Bank of India. The company offers various services to its customers that include Investment Banking, Equity, Commodity Sales and Trading etc. The firm is the asset reconstruction and securitization business of the JM Financial Group.
On the other hand, Leelaventures Limited is the ultimate holding company of the hotel group and is traded on the Bombay Stock Exchange and National Stock Exchange of India. Hotel Leelaventure Limited is itself part of The Leela Group business conglomerate. Leela group is a chain of premium and luxury 5-star hotels and resorts that has its presence across India. The hospitality chain was founded in 1986 and at present is a group of nine luxury palaces and hotels.
“We are confident at these well-endowed funds participating in the refinancing plan. Thus, we do not anticipate promoter stakes to be diluted and, consequently, not leading to any changes in the management,” said Vivek Nair, chairman and managing director of Leelaventure.
Followed by the deal, Leela’s board also intends to increase the authorized share capital of the company in the next annual general meeting which is expected to happen in August. The company is planning to increase the capital from Rs 260 crore to Rs 460 crore based on the shareholders’ approval.