YES Bank may get possession of Ritz Carlton, Bengaluru due to loan default by current owner

6 Sep 2022 , 07:14 AM

The renowned Ritz Carlton hotel in Bengaluru might soon be taken over by YES Bank. According to a Mint article, the hotel’s holding firm, NEL Holdings South Ltd, has not paid the bank the Rs300 crore it owes.

The bank would either sell it to a new buyer after the acquisition or find a suitor when it files the lawsuit in the National Company Law Tribunal (NCLT), according to the newspaper. The money due by NEL Holdings had been classified as non-performing assets by the bank in 2020.

The first Ritz Carlton property operated by Marriott International was in Bengaluru.

 NEL Holdings South Ltd., owned by Nitesh Shetty, owes money to numerous banks and debtors. Additionally, it is defending itself against numerous lawsuits brought by buyers due to incomplete projects.

The 281-room hotel in Bengaluru was built thanks to a loan the company received from YES Bank. The profit margins are tight, though. During the years of construction, NEL committed to rent the land for Rs39.4 lakh per month.

But the rent has now been increased to Rs1.3 crore. However, YES Bank feels that considering the rate in the region, the rent should be higher than the current rate.

The hotel, which debuted in 2013, only gives its parent company, the Marriot Group, 0.4% of its overall profits. A single night in the hotel must cost at least Rs21,000

Citigroup Property Investors now owns 74% of NEL Holdings South Ltd. The business recorded a loss of more than Rs66 crore for FY21.

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