YES Bank may soon take over Bengaluru’s iconic Ritz Carlton hotel. The hotel’s holding company, NEL Holdings South Ltd, has failed to repay the Rs 300 crore it owes to the bank, a report by Mint stated.
After the acquisition, the bank will either sell it to a new buyer or find a suitor when it files the case in the National Company Law Tribunal (NCLT), the report added. The bank had, in 2020, declared the funds owed by NEL Holdings as non-performing assets 2020.
Ritz Carlton in Bengaluru was the first property of Marriott International under the Ritz Carlton brand.
Nitesh Shetty-owned NEL Holdings South Ltd owes money to several banks and creditors, according to Mint. It is also fighting various legal battles filed by buyers for the non-completion of projects.
The company had taken a loan from YES Bank to make the 281-room hotel in Bengaluru. However, the profit margins are very thin. NEL agreed to pay Rs 39.4 lakh per month as the rent of the land during the years of construction.
However, now the rent has been revised to Rs 1.3 crore. Still, YES Bank believes that the rent should be more than the current rate given the rate in the area.
The hotel that opened in 2013, gives only 0.4 per cent of the gross revenues to the Marriot Group, its parent organisation. The minimum price for staying one night in the hotel is Rs 21,000, the report further said.
Currently, Citigroup Property Investors has a 74 per cent stake in NEL Holdings South Ltd. In FY21, the company reported a loss of over Rs 66 crore.
