The distressed assets segment saw more action this week with at least one more well-known company reaching a resolution while several other cases moving forward.
Essar Steel, Ruchi Soya Industries Ltd, Hotel Leelaventure Ltd, Amrapali Group and Jet Airways (India) Ltd were the big companies in news this week in the stressed assets segment.
Patanjali Ayurved received court approval to buy Ruchi Soya while Hotel Leelaventure hit a roadblock with the capital markets regulator asking the company to seek fresh shareholder approval for its deal with Brookfield.
Meanwhile, a bankruptcy tribunal will hear claims about Jet Airways’ real estate properties on August 8, although the debt-laden airline’s revival appears difficult.
Jet Airways
The resolution professional for the grounded Jet Airways is fighting to keep its leased headquarters, Siroya Centre, in Mumbai’s Andheri region intact till the insolvency proceedings are over.
The airline’s main lender State Bank of India (SBI) moved an intervention application against mortgage lender HDFC's plea claiming rights over a portion of Jet Airway’s BKC property.
Earlier this week, the National Company Law of Tribunal (NCLT) Mumbai bench adjourned the matter for August 8.
As of now, the lenders have invited expressions of interest from the potential bidders to sell the remaining assets.
Essar Steel
The longest-running insolvency case just got longer. India’s apex court put on hold the sale of Essar Steel to ArcelorMittal for Rs 42,000 crore.
A bench headed by Justice RF Nariman will now hear the matter on August 7. In the meantime, a committee will monitor the case.
The court’s decision came on a plea by a consortium of lenders led by State Bank of India against a July 4 order of the National Company Law Appellate Tribunal (NCLAT). The tribunal had said that Essar Steel's operational creditors had to be treated on a par with financial creditors.
Amrapali Group
The Supreme Court ordered NBCC (India) Ltd to take over the unfinished real estate projects of Amrapali Group, providing relief to thousands of homebuyers and tightening the screws on errant developers.
The top court also ordered the cancellation of Amrapali’s registration under the Real Estate (Regulation and Development) Act and its land leases granted by the Noida and Greater Noida authorities.
The decision came on a petition by homebuyers against Amrapali. In 2017, around 2,500 homebuyers has moved the court seeking possession of homes and compensation from Amparali for failing to deliver the projects on time. In total, more than 42,000 homebuyers are stuck in Amrapali projects, mainly in national capital region.
Ruchi Soya
The insolvency tribunal has given its approval to Baba Ramdev-led Patanjali Ayurved's bankruptcy resolution plan worth Rs 4,350 crore for edible oil firm Ruchi Soya.
However, the approval is subject to certain conditions and modifications including filing of affidavits showing the source of funds and details of the resolution process cost. These have to be submitted before the next hearing on August 1.
Out of the aggregate amount of Rs 4,350 crore, a sum of Rs 4,235 crore shall go towards each class of creditors and stakeholders, and the rest Rs 115 crore will go towards equity infusion for improving operations of Ruchi Soya.
Hotel Leelaventure
The Securities and Exchange Board of India (SEBI) ordered Hotel Leelaventure Ltd to seek shareholder approval for a multi-million-dollar deal with Brookfield Asset Management Inc. afresh after making additional disclosures.
The markets regulator, in its order, stated that it may also initiate adjudication proceedings against JM Financial Asset Reconstruction Company for violating its takeover norms. JM Financial ARC had converted loans into equity for buying a 26% stake in debt-laden Hotel Leelaventure in 2017.
This delays Brookfield’s plan to establish its presence in India’s luxury hospitality sector. In March, the Canadian investor had inked a pact to acquire four Leela hotels and hospitality business for Rs 3,950 crore ($576 million then).
In April, cigarette-to-hotels company ITC Ltd had approached SEBI and National Company Law Tribunal (NCLT) against the deal. State-run Life Insurance Corporation (LIC) also challenged the deal. Both ITC and LIC, which together own 10% stake in Hotel Leelaventure, voted against the deal. SEBI put the deal on hold in April.