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Hyatt Regency closure: Hotel management blames Yes Bank for blocking account, Holding back funds

Wednesday, June 9, 2021, 16:38 Hrs  [IST]
HBI Staff | Hyderabad

According to New Indian Express, Asian Hotels (West) Ltd said in a statement on Tuesday that the hotel management has had to take the unprecedented move of temporarily shutting down the Hyatt Regency hotel in Mumbai because Yes Bank, with which it maintains an account, has blocked that account and held back all funds.

Yes Bank took this drastic step after the hotel management defaulted on loan repayments. 

According to the hotel management, Yes bank has hold all funds including daily hotel collections in the escrow account due to which the hotel is not allowed to make any payments, including statutory payments like GST, VAT, TDS, PF, ESIC, etc, vendors payments, salaries of on roll employees and other critical hotel services from the said account.

Yes Bank has only made some payments from the company’s escrow account towards bills for the hotel’s electricity, water and gas consumption.

The company has more than 300 hotel and corporate employees on its rolls. According to an earlier disclosure to the stock exchanges, the hotel defaulted on paying INR 4.32 crore (principal and interest) in May 2021.

Out of the total amount of INR 4.83 crore due on different dates in April and May 2021, the hotel could make a payment of only INR 51 lakh.

A query sent to Yes Bank by this publication remained unanswered. The company’s total outstanding loans (from various banks) stood at INR 262.54 crore as on May 1, 2021.

Covid-19 had severely impacted revenues of Asian Hotels (West). In the 9-month period till December 2020, the company could generate only INR 30 crore revenue compared to INR 81 crore in the same period in financial year 2019-20.

The company also posted a net loss of INR 32 crore during the period against a profit of INR 3 crore in the previous year.

The company owns two properties-Hyatt Regency in Mumbai and JW Marriott in Aerocity New Delhi.

 
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