Hyatt Regency Mumbai’s employees have moved the industrial court in Mumbai on Tuesday seeking protection from termination following the temporary shutting down of the hotel due to paucity of funds, and have filed a case against the hotel and the promoter of (West), people familiar with the matter told ET.
The hotel has over 300 on-roll employees. Some of the them are part of the Bharatiya Kamghar Sangh. The court granted temporary relief to Bharatiya Kamgar Sangh until the next date of hearing on June 28. In a response to ET’s queries on the matter, Hyatt Hotels & Resorts said it had no comments to share. Asian Hotels (West) did not respond to an email seeking comments till the time of going to press.
On Monday, the American multinational hospitality chain temporarily shut down its Hyatt Regency hotel in Mumbai, citing non-payment of dues from owner Asian Hotels (West).
ET spoke to some independent directors who said they have flagged operational and liquidity concerns in the company. Trouble has been brewing at the company for some time.
ET reported on Monday that the company has been facing a severe liquidity crunch due to high debt exposure and has been looking to dilute its equity in both its hotels- Hyatt Regency Mumbai and JW Marriott, Aero City in Delhi for the past one year.
A bitter family fight has also led Sudhir Gupta, an executive whole time director in the company to drag Asian Hotels (West) to NCLT. Gupta filed a petition against the company a few months ago. The matter is yet to come up for hearing. Sandeep Gupta is the other executive whole time director and managing director of Aria Hotels & Consultancy, a subsidiary of Asian Hotels (West) which was incorporated in May 2007 and developed the JW Marriott hotel in Delhi’s Aerocity.
The company told BSE on Tuesday that after it defaulted on Yes Bank’s interest payment in April, the bank has held all its funds including daily hotel collections in the escrow account and that the company or hotel is not allowed to make any payments including government taxes, on roll employee salaries for more than 300 hotel and corporate employees, and vendor payments.
Yes Bank is the principal lender to Asian Hotels (West). The company had informed BSE in May that it defaulted in the payment of interest/repayment of principal amount of loan to Yes Bank. Asian Hotels (West) had earlier stated its total amount of outstanding borrowings from banks and financial institutions was Rs 262.54 crore as of May 1 this year.
“The company defaulted on Yes Bank’s due installment on April 28, 2021 (for the first time in history) due to the massive effect of Covid-19 pandemic on the company, entire hotel industry across the country and globe,” Asian Hotels (West) stated in a filing to BSE on Tuesday. “Yes Bank has only made some payments from the company’s escrow account towards the hotel’s electricity, water and gas charges,” the company stated.
A Yes Bank spokesperson said as a matter of policy, the company does not comment on client or company specific information.