The National Company Law Tribunal (NCLT) has cleared Adani Good Homes’ sole bid for Radius Estates, which became controversial due to opposition from a section of creditors, according to people aware of the matter.
ICICI Prudential Venture Capital Fund and Beacon Trusteeship, who are creditors of the company and held its debentures on behalf of investors, had opposed Adani’s bid for the real estate company citing foul play. They had demanded that the insolvency process be scrapped and started afresh.
The two financial institutions alleged that the company’s resolution professional Jayesh Sanghrajka had colluded with the largest creditor HDFC to influence the bankruptcy process in favour of Adani Good Homes, which resulted in only a single bid being received for the company.
NCLT had rejected the allegations, saying “suspicion however strong is not a substitution for proof” at a hearing in late November, which was presided over by justices Anuradha Bhatia and HV Subba Rao. The tribunal did not find any evidence to support the claims of the debenture holders.
Adani Good Homes has offered Rs 76 crore to the financial creditors of Radius Estates who have total loans outstanding of Rs 1,700 crore. This amounts to a haircut of 96% for creditors. The Adani group company has promised to construct the residential project of the company in Mumbai at no further cost to the home owners.
Adani’s bid was approved by more than two-thirds majority of the company’s creditors before it was taken to NCLT for its final stamp. Insolvency laws in India require two-thirds of creditors of a bankrupt company to approve a debt resolution process. Almost all of the 700 homeowners backed its bid. They command a third of the voting power in the committee of creditors of the company. Financial creditors such as HDFC and Yes Bank also backed its bid.
Homeowners had collectively advanced ₹800 crore to the company to book their homes. Though homeowners have the same rights as financial creditors, they are counted as a separate class of creditors. Of the ₹1,700 crore claims filed by the financial creditors, the debenture holders’ claims are estimated at around Rs 200 crore.
Adani had withdrawn one of the original conditions of its bid after ICICI Prudential and Beacon Trusteeship opposed it, ET had reported on August 24. Had the condition been retained, Adani Good Homes could have potentially collected Rs 800 crore in debts of the company from creditors, who owed Radius Estates for various contracts.
