Asian Hotels (West), owner of Hyatt Regency Mumbai, whose operations have been suspended, on Tuesday said Yes Bank has barred it from making payments from an escrow account following a loan default.
In a regulatory filing, Asian Hotels (West) said the company on April 28, 2021, defaulted on a loan repayment to Yes Bank due to the massive effect of COVID-19 pandemic on the company and the entire hotel industry.
Since then, Yes Bank has held all funds "including daily hotel collections in the escrow account and the Company/ Hotel are not allowed to make any payment including government taxes (like GST, VAT, TDS, PF, ESIC, etc.), vendors payments, on roll employees'' salaries (more than 300 hotel and corporate employees) and other critical hotel services from the said account," it added.
Yes Bank has only made some payments from the company's escrow account towards the hotel's electricity, water and gas charges, Asian Hotels (West) said.
On May 28, in a filing to BSE, Asian Hotels (West) had said its current default amount towards Yes Bank was Rs 4.32 crore.
On Monday, Hyatt Hotels Corporation suspended operations at Hyatt Regency hotel in Mumbai and said the property will remain closed till further notice.
"As a result of no funds forthcoming from Asian Hotels (West) Ltd, the owner of Hyatt Regency Mumbai, to sustain the operations of the hotel, a decision has been taken to temporarily suspend all operations for Hyatt Regency Mumbai," Sunjae Sharma, Vice President and Country Head - India, Hyatt said in response to a query.
The hotel will remain closed until further notice, he added.
UNION MOVES INDUSTRIAL COURT: A day after Hyatt Regency Mumbai suspended operations due to paucity of funds, employees of the hotel, who are part of the Bharatiya Kamgar Sangh, have moved the Industrial Court seeking protection from termination of services. The hotel has over 300 employees, of which 193 are part of the union. Employees told CNBC-TV18 that they haven't been paid salaries for April and May and that they didn’t have any prior intimation about a possible suspension of services. Asian Hotels West registered a loss of Rs 11 crore in Q3FY21 amid travel curbs due to the COVID19 pandemic.