Cash-strapped hospitality chain Hotel Leela Venture has defaulted in payment of quarterly interest of Rs 21.2 million to Life Insurance Corporation of India (LIC).
Hotel Leela Venture, which currently has a debt of over Rs 36 billion, had issued secured redeemable non-convertible debentures on private placement basis aggregating to Rs 900 million to LIC in December, 2008.
“The company has defaulted in payment of quarterly interest of Rs 21.2 million which was due on June 19, 2018,” Hotel Leela Venture said in a regulatory filing.
Hotel Leela Venture said its “operating cash flows are not sufficient to service its term loans and NCDs and the funds of the company are escrowed with its lenders and are also monitored by the lenders”.
“The company is pursuing with the lenders for debt restructuring,” it added.
Hotel Leela Venture said the total interest outstanding as on date is Rs 121.4 million and principal redemption amount outstanding as on date is Rs 450 million.
Earlier this month, Hotel Leela Venture’s board approved a share issue of up to 1.25 billion shares on preferential basis to JM Financial Asset Reconstruction Company for converting of part of debt into equity.
According to the BSE data, JM Financial Asset Reconstruction Company had 26 per cent stake in the company as of March 2018.