Singapore-based premium luxury resorts chain Banyan Tree is in advanced stages of talks to buy a controlling stake in Aman Resorts, the Middle East luxury hotel chain. Realty major DLF Ltd had acquired Aman Resorts in November 2007 for $400 million.

In its bid to become a zero-debt company in five years and rid itself of non-profitable, non-core assets such as Aman, DLF is looking at selling ?controlling stake? in it for around $350 million, a person privy to the negotiations said.

Currently, DLF owns 97% stake in Aman Resorts. While the negotiation is for selling a majority stake to Banyan Tree, the exact quantum on the block is not known. The source says DLF is likely to hold onto one asset: the newly opened Aman Lodhi in central Delhi, which would not be part of the deal. Goldman Sachs is advising DLF on the deal.

Industry observers said since Banyan Tree is a successful brand in many developed countries and Asia and has the expertise in running premium resort chains, it would be able to turnaround the loss-making Aman Resorts. ?Banyan Tree would be able to turnaround the fortunes of Aman Resorts with its expertise in the segment which would automatically increase its presence across the globe,? an industry analyst said.

Running hotels and resort chains do not form part of the core competence of DLF. Therefore, it would be prudent on its part to sell majority stake in the business.

When contacted by FE, both the companies maintained the veil of secrecy. While Banyan Tree did not offer comments on the deal a DLF spokesperson said, ?We would not comment on market speculations?.

Sources told FE that Banyan Tree may acquire Aman Resorts through an Indo-China fund it raised two years ago for acquiring assets in Asia.

DLF, which was hard hit by the downturn in the real estate market that started in the middle of 2008 and persisted into 2009, has said it will exit non-core businesses and bring down its overall debt to zero over a three-year period. DLF?s debt was around Rs 16,000 crore at the end of 2009-10.

Luxury hotels in India are struggling with poor occupancy. Aman Resorts patrons, usually rich Americans, have put off exotic travel in the wake of economic downturn and terror alerts in India since the 2008 terror strike on Mumbai.

Aman operates 23 luxury hotels across Thailand, Bhutan, Cambodia, China, France, India, Indonesia, Laos, Montenegro, Morocco, Philippines, Sri Lanka, the Turks and Caicos Islands and the US.

Recently, Malaysian sovereign fund Khazanah had shown interest in buying stake in Aman but talks failed owing to differences over valuation.

DLF had said in May that it was looking to sell Aman Resorts and cut its debt by Rs 5,000 crore through sale of non-core assets and refunds from various government authorities. The company?s management had also told analysts in a conference call that it aims to become debt free by 2014. The Banyan Tree chain already co-owns a resort at Chikmagalur in Karnataka under the Angsana brand. However, it is slated to open its first resort under the Banyan Tree brand in Kerala sometime in 2011. Banyan Tree?s global expansion is set to increase its presence to over 80 locations in 30 countries by 2013.