Though Capt Nair did not disclose the cost of the hotel project, a thrust for the development would only be provided after recovering the dues from the ongoing arbitration over the Delhi property.

The company expects the arbitration process to be completed by March next year, and hopes to recover a sum of Rs 260 crore from it. The arbitration was on account of a property in New Delhi acquired by the company through auction from Hudco.

However, the company did not find developing the land to be a smooth affair and thus, returned it to Hudco. The clause in the memorandum of understanding (MoU) made it mandatory for the two parties to refer the issue to the arbitrator.

Hotel Leelaventure had made an investment of Rs 170 crore in the property and had recovered around Rs 60 crore till date. The company, however, claims to recover around Rs 260 crore inclusive of the compounded interest till date.

The recovery of dues would also help the company reduce its interest cost, which is currently putting pressure on its bottomline.

Meanwhile, the 300-room Bangalore five-star hotel is likely to have a soft opening in April 2001. The project cost of the Bangalore property is estimated to be Rs 300 crore.

The Bangalore property also has an adjacent seven-storey commercial property - a large part of which has already been leased out to infotech companies, banking sector and large MNCs, Capt Nair said.

The commercial complex adjacent to the The Leela in Mumbai, spread across 60,000 square feet, is complete and is likely to be occupied by the end of the month. Around 40 per cent of space in the complex has already been leased out and talks for the rest are in progress.

The commercial complex in Mumbai also has two storeys exclusively for retail outlets for which international brands are eager to occupy space, company officials said.