K Raheja Corp-promoted Chalet Hotels on Friday said the company is planning to use part of the proceeds from its Rs 1,640-crore initial public offering (IPO) to pare debt.
In an interview to CNBC-TV18, Sanjay Sethi, managing director, said the the balance amount from IPO would be used for general corporate purpose.
Sethi said, "Company's current net debt is around Rs 2,500 crore and after paying off the debt from IPO proceeds and other reserves, the debt will be brought down to Rs 1,500 crore, which will bring them close to 1:1 debt equity ratio. This healthy ration will give us an opportunity to grow the business through greenfield as well as brownfield options."
"Going forward, the company will be adequately capitalised with Rs 1,500 crore debt. We will be adding 580 rooms and three different hotels and developing 1.1 million square feet of office space in existing land parcels, where the hotels are located," he said.