2 July 2019: The Union Bank-led consortium of 13 banks is hopeful of finding a resolution for their Rs 1,100-crore exposure to Adlabs Entertainment before September outside the NCLT either by selling their distressed loans to ARCs or finding an investor, two sources familiar with the development said.
The bankers, however, are more hopeful and keen on selling their loans to asset reconstruction companies, and a loan auction is likely to begin shortly, said the sources.
It can be noted that while Tourism Finance Corporation had moved the Mumbai NCLT last September to recover its Rs 46 crore dues from the company, state-run Corporation Bank had filed for bankruptcy in early June to recover its Rs 80-crore loan. However, the bankruptcy tribunal has not approved both these pleas as 11 other banks are not keen on a bankruptcy process.
This has renewed the hope of other 11 lenders to find a resolution, said a banker. The bankruptcy laws demand 75 percent of the lenders consent for a plea to be admitted for insolvency proceedings.
Apart from Union Bank, Adlabss bankers include Bank of Baroda, Indian Overseas Bank, Bank of India, Central Bank, Syndicate Bank, Punjab & Sindh Bank and Jammu & Kashmir Bank among others.
The lenders to the Manmohan Shetty-owned company that runs the countrys first theme park Imagica near here on the Mumbai-Pune Expressway along with a 5-star hotel are at advanced stage of discussions for an out-of-court settlement, which includes selling their loans to an ARC or finding a financial investor a buyer for a majority stake from the popular Hindi film producer Shetty who owns 32 percent in the firm. The rest of the stakes in the company are with the public.
We are in the process of soliciting consent from other 11 banks to sell our loan exposure collectively to an investor or an ARC, said the banker cited above.
When contacted a senior official at Union Bank, which is the lead lender with an exposure of Rs 240 crore to the company, confirmed to PTI that “they are at an advanced stage of discussions with all interested parties,” but refused to share details.
Adlabs refused to confirm or deny the developments, saying, the management is in active conversation with the lenders to find a resolution outside the bankruptcy tribunal.
There have been reports that asset reconstruction company Arcil has expressed interest in taking over the debt. In fact, Arcil along with its hedge fund partner Avenue Capital has submitted a proposal to the creditors to take over the stressed loans.
Union Bank had in January appointed financial consultant BDO to advice it on the loan sale, while the company has roped in Imap India to advise it on a debt resolution.
Another source said the company is in negotiations with some financial investors led by Shaan Agro & Reality India which already owns a 7.85 percent in Adlabs. Another investor who has shown interest is Catalytic Solutions & Management Services, floated by Ashutosh Maheshwari, who was earlier with Rabobank and Motilal Oswal.
This consortium is keen on rescuing the company, though it isnt yet clear whether it would buy the remaining equity or partner with Shetty for a one-time settlement with creditors, the source said.
Apart from the theme park spread over 130 acres at Khopoli and the 287-key Novotel hotel nearby, Adlabs has a 204-acre land parcel nearby which it has been trying to sell for long but landed in a legal tangle.
The Imagica runs a waterpark, an indoor snow-based theme park and Bollywood theme park apart from rollercoasters. The Novotel hotel is 70 percent-owned by Paris-based hotel chain operator Accor group.
In FY18 it had signed a term sheet with big bull Radhakishan Damanis Bright Star Investments for the hotel, along with a 6.1 acre underlying land and an additional 2.9 acres for over Rs 215 crore, but the deal did not go through as banks refused to give their consent for the deal.
The Adlabs counter closed 2.34 percent up on the BSE at Rs 5.25 as against a 0.33 percent gains on the benchmark.