MGM Healthcare has acquired Appu Hotels Ltd, which owns 5-star hotel chain Le Meridien, for Rs 423 crore
The Le Meridien hotels in Chennai and Coimbatore are likely to be turned into hospitals, due to a change in ownership. MGM Healthcare Private Ltd, which runs the MGM Hospital in Chennai, has reportedly purchased Appu Hotels Ltd, which owns Le Meridien in Chennai and Coimbatore, for Rs 423 crore. According to reports, the National Company Law Tribunal (NCLT) approved MK Rajagopalan, chairperson and MD of MGM Healthcare’s bid to take over Appu Hotels. In 2020, the National Company Law Tribunal had admitted an insolvency petition against Appu Hotels Ltd in a case filed by the Tourism Finance Corporation of India Ltd.
According to reports, MK Rajagopalan has already raised Rs 150 crore and will turn to funding from a nationalised bank for the remaining amount of Rs 273 crore. The group has plans to convert the Le Meridien hotel in Chennai’s Guindy to a healthcare facility while retaining the Coimbatore property as a hotel. The final order approving MGM’s bid was passed by the Chennai First Division Bench on July 15, 2021. The court also overruled objections raised by the original promoters led by Palani G Periasamy with regard to the valuation of properties.
Speaking to the Times of India, Palani G Periyasamy, promoters of Le Meridien, said that the group had raised objections to the properties being evaluated so low. An objection has been raised with the group arguing that the property was valued at Rs 1,600 crore. The counsel for the promoter argued in court that the valuation of the property was at least 30% lower than another valuation done in September 2019. The court was also informed that the COVID-19 pandemic resulted in further market shocks which led to a drop in valuation.
MK Rajagopalan is chairperson of Sri Balaji Educational and Charitable Public Trust and Sri Balaji Vidyapeeth Trust, which runs the Mahatma Gandhi Medical College and Research Centre (MGMCRI) and Sri Sathya Sai Medical College.