Lavasa CoC rejects bids of Haldiram, Deshpande; seeks more time from NCLT

The committee of creditors (CoC) of real estate firm Lavasa Corporation has decided to seek more time from the National Company Law Tribunal (NCLT) for the debt resolution of Lavasa Corporation after the bids made by both applicants — Haldiram Snacks and Pune-based real estate builder Anirudh Deshpande — were found non-compliant with the insolvency norms. 

The resolution professional (RP) has asked the NCLT for resolution of all 40 subsidiaries of Lavasa Corporation together with the parent firm, which was coming up near Pune, Maharashtra. The company was sent for debt resolution in August last year after it failed to repay debt. Its promoter, HCC, wrote off its entire Rs 1,046 crore investment in the company.

Indian lenders have claims worth Rs 6,412 crore against the company and, of this, the RP has admitted claims worth Rs 5,560 crore (see chart).

Lenders expect the entire debt resolution process to be delayed further as the NCLT takes a call on a single debt resolution for Lavasa and its subsidiaries. A source said the offer of Haldiram was ranked higher as compared to Deshpande’s offer but there was no consensus among the members of the consortium to accept the offer. 

An email sent to the RP and Haldiram Snacks did not elicit response until going to press. 

Lavasa has 10,514 acres, including 455 acres on lease (as on March 31, 2018), which had attracted the offers. “The new investor will require an additional investment of Rs 10,000 crore to revive the project,” said an HCC official. 

The official said the IBC should give an opportunity to the promoters to make a bid for Lavasa like in the USA where companies referred to bankruptcy court receive protection under Chapter 11 filings. 

Lavasa started making losses after the UPA government cancelled its environment clearance in 2010.

After failing to implement a financial restructuring and resolution plan approved by the Joint Lenders Forum (JLF) in 2015 due to a deadlock among lenders, JLF came up with a Strategic Debt Restructuring (SDR) plan for Lavasa on September 20, 2017.

The company then tried to take an investor to help revive Lavasa but the subsequent Reserve Bank of India’s February 12, 2018, circular on the resolution of stressed assets saw the SDR being withdrawn. Later, an operational creditor of Lavasa filed an application before the NCLT for its admission under the IBC.