Originally set up by HCC in 2000, Lavasa was developed as a picturesque hill station. It defaulted on bank loans after the environment ministry issued a stop-work order to the project in 2010. Since then, the city has turned into a ghost town with few tourists visiting it during weekends. Many buyers are awaiting possession of their houses, while several others who had received keys to their houses have moved out.
During the NCLT
hearing, the resolution professional of Lavasa mentioned that a few bidders had proposed extinguishing the debt of all Lavasa companies, instead of the resolution of standalone debt of LCL worth Rs 6,200 crore. However, the resolution professional informed the tribunal that taking a call on such conditions was not in Lavasa’s control because there were several other legal entities with different sets of bankers.
The court was also told that due to the symbiotic relationship with the parent, several of Lavasa subsidiaries would lose their revenue streams. Hence it made sense to consolidate all resolution plans.
were providing captive power to Lavasa, apart from running basic transport, maintaining and running the convention centre, and running retail operations on the premises of Lavasa Corporation. A separate company was operating a luxury hotel.
Therefore, the NCLT
was of the opinion that the inter-linkages and synergies between these companies
to keep Lavasa as a running township was important and, to achieve maximisation value for all the companies, it was imperative that all bidders made a single offer for these companies by way of a single offering.
Interestingly, the first set of three bidders had put “consolidation” as a precondition to the resolution plan. Therefore, it will be harder to find a resolution plan for any of these companies on a standalone basis if the supply and demand from the rest of the companies are not guaranteed. “However, if the group companies of LCL are resolved in a coordinated/consolidated manner, a much more value-maximising resolution could be achieved,” the NCLT said.