Troubles do not seem to end for Emaar MGF - the developer of the Commonwealth Games (CWG) village.
Its initial public offer (IPO) of shares got put off twice and now, reliable sources say that it has all but formally abandoned its Rs 15,000-crore plan to build 30,000 hotel rooms by 2015.
Two years after the company, a joint venture (JV) between Dubai-based Emaar Properties PJSC and MGF Development of India, decided to go big on India's hospitality sector, financial troubles have hit home.
The company had planned to build 18 high-end luxury hotels, 80 limited service hotels and 100 budget hotels across major cities in India.
The official spokesperson for Emaar MGF said in an e-mailed response, "We intend to use our existing real estate development capabilities to build and own hotels. However, we have decided that we will commence developing hospitality projects only once we have obtained financial closure for the projects."
But the statement said the firm was firm on taking the Indian JV forward.
The JV has around Rs 5,000 crore of debt on its balance sheet. The company officials had earlier announced that they would be able to repay Rs 2,000 crore by March 2011 through IPO proceeds, internal accruals and "different lines of credit available." There is no indication of that yet.
Emaar Properties, hit by Dubai's debt crisis, is fighting the service burden of $1.3 billion (Rs 5,876 crore) in debt, with reports that it may even have to sell its headquarter building.
In India, Emaar MGF's latest IPO plan is for a modest Rs1,500 crore. Timing is not decided yet.