Five-star hotel chain Hotel Leelaventure is set to sell its property in Kovalam In

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Kerala for Rs 5 billion to cut its debt, a Mumbai based business daily said on Thursday citing the group's Chairman C.P. Krishnan Nair.

The property, Leela Resorts Kovalam, is being sold to non-resident Indian industrialist Ravi Pillai, the paper said, adding Leela will subsequently enter into a management contract with Pillai to manage the property for 30 years.

The paper said Hotel Leela has a debt of Rs 38.3 billion at the end of FY11 and has an ongoing capital expenditure plan of more than Rs 40 billion.

In April, the firm had launched a 260-room property in Delhi, and plans to open one in Chennai later this year.

In March, the hotel chain had said it plans to raise Rs 9.5 billion by selling and developing land for residential purposes. The plan includes sale of a commercial park in Chennai.

The company had last month executed a joint venture with Prestige Estate Projects to develop premium apartments on part of its land bank in Bangalore. Hotel Leela expects to generate about Rs 1.5 billion over 4 years through this development.

Late on Wednesday, Hotel Leela reported a net loss for the quarter ended June on higher interest and depreciation costs due to the opening of the New Delhi property.

On Thursday, shares in the company fell more than 7 percent in early trades reacting to the results. At 10:56 a.m., the stock was down 4.69 percent at Rs 43.65 in a Mumbai market that was down 0.3 percent.