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Leela Palaces Hotels & Resorts plans to invest up to INR 185 crore in its subsidiary Buildminds Real Estate Private Limited to fund capital requirements for the development of an upcoming five-star hotel in Ayodhya. The investment will be made through the subscription of Compulsorily Convertible Preference Shares (CCPS) in one or more tranches over one or more years, depending on the subsidiary’s funding requirements. The funds will be used towards project-related expenditure, working capital and other general corporate purposes. The company said the investment could be made on or before the financial year 2028-29. Leela Palaces currently holds a 76% stake in Buildminds and said the proposed investment would not alter its management control or economic interest in the subsidiary.
Leela Palaces Hotels & Resorts plans to invest up to INR 185 crore in its subsidiary Buildminds Real Estate Private Limited to meet the capital requirements of an upcoming five-star hotel in Ayodhya, the company said in a regulatory filing on August 10. The investment will support the subsidiary's ongoing project development and operational requirements.
The proposed funding will be provided through subscription to Compulsorily Convertible Preference Shares (CCPS), with the investment to be made in one or more tranches over one or more years. The timing and quantum of each tranche will depend on Buildminds' funding requirements.
Buildminds is responsible for developing the upcoming five-star hotel in Ayodhya. Leela Palaces said the proposed investment forms part of its broader commitment to fund the subsidiary's capital requirements and support its ongoing business operations, project development activities and long-term growth plans.
The funds will be deployed towards project-related expenditure, working capital requirements and other general corporate purposes of Buildminds. According to the company, the investment may be made on or before the financial year 2028-29, subject to the subsidiary's funding needs.
Leela Palaces currently holds a 76% stake in Buildminds. The company said the proposed investment, being made in an existing subsidiary, would not result in any change in management control or its economic interest in Buildminds.
The investment comes as Buildminds progresses with the development of the proposed five-star hotel in Ayodhya. The company has not disclosed the total project cost, development timeline or the planned number of rooms for the hotel in its regulatory disclosure.
The proposed CCPS subscription will therefore provide Buildminds with funding for the project's development expenditure as well as its working capital and corporate requirements over the coming financial years. The investment will be deployed in stages according to the subsidiary's requirements rather than as a single upfront commitment.
Leela Palaces said the funding arrangement would support Buildminds' project development and business operations while maintaining the existing ownership and management structure of the subsidiary.
Source - PTI
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