Hotel Leela Venture Ltd plans to spend 22 billion rupees over one and a half years to set up three new hotels in India, the company's chief financial officer said on Thursday.
The luxury hotel chain operator will use the proceeds from an earlier foreign currency convertible bonds issue (FCCB), V.L. Ganesh told reporters at a media briefing.
The company has issued FCCBs twice, in August 2005 and April 2007, he said. He did not comment on whether the firm was planing to buy back the FCCBs following the central bank's move to relax buyback rules amid slumping share prices.
"The hotels will be set up in Udaipur, Chennai and New Delhi," he added.
The company will invest about 11 billion rupees of the total amount on the Delhi property, which is scheduled to be be ready for guests by August 2010, ahead of the Commonwealth Games.
Leela currently has two business properties in Mumbai and Bangalore and two leisure resort properties in the beach townships of Goa and Kovalam.
The 352-room Bangalore property alone contributes 43 percent of the firm's annual revenues, with Mumbai contributing about 30 percent, Ganesh said.
Leela plans to decrease Bangalore's contribution to revenues to 30 percent in 18 months, once the new properties become operational.
Current room rates range from 12,000 rupees in Mumbai to around 16,000 rupees in Bangalore.
Following the launch of the new properties, the firm plans to increase its annual revenues to over 10 billion rupees by 2,011, from about 6 billion rupees now, he said.
The company also has upcoming projects in Agra, Hyderabad and Pune.
Hotel Leela has not yet set a limit on the planned development spend for these properties.
Room occupancy has dropped by between 5 percent and 10 percent in December 2008, following the militant attacks in Mumbai the month before, he added.
Ganesh refused to give a outlook for the Jan-March period.
Shares of Hotel Leela ended down 1.04 percent at 19.10 rupees in the Mumbai market, which ended about 3.5 percent down.