10 April 2019: The Mumbai bench of the National Company Law Tribunal (NCLT) has granted one month’s time to Hotel Leelaventure (HLVL) to clear its dues in a bankruptcy case filed by JM Financial Asset Reconstruction Company.
The BSE-listed hotel chain had sought four months’ time to settle its dues to JM Financial ARC after Canadian alternative asset management company Brookfield last month agreed to acquire its assets.
“We have sold assets of our company to Brookfield for around Rs 3,950 crore, but it will take a certain time for money to come, and only then we will be able to repay it to our lenders,” said Ashish Pyasi, an advocate with law firm Dhir & Dhir Associates who was representing Hotel Leelaventure in the case. “There is already an announcement with this regards on the stock exchange, but we are seeking four months’ time from the tribunal.”
On March 18, Vivek Nair-promoted HLVL had announced that the company’s hotel business, together with all the assets and liabilities of hotels located in Bengaluru, Chennai, Delhi and Udaipur were being acquired by Brookfield on a slump sale basis.
Rohit Gupta, the counsel for JM Financial ARC, informed the tribunal that the total debt of the company is about Rs 5,900 crore. “There were around 14 banks and financial lenders who have assigned their debts to JM Financial ARC and that’s how they become a financial creditor,” said Gupta, adding that one more firm, Phoenix ARC, has also taken over debt from four banks and has become a financial creditor of the company.
However, the NCLT bench, presided over by VP Singh and Ravikumar Duraisamy, observed that four months is too long a duration for the tribunal to grant and, hence, it is allowing a month’s time to the lender as well as HLVL to come out with a repayment plan.