US private equity major Blackstone Group has received the approval of bankrupt Golden Jubilee Hotels’ lenders to acquire the Hyderabad-based hotel that had shot into limelight after hosting Ivanka Trump, the fashion designer daughter of US President Donald Trump last year, said two persons with direct knowledge of the development.
The deal assumes significance as this will be the first transaction that will see international institutional capital coming in for the financial resolution of any Indian company under the Insolvency and Bankruptcy Code.
The resolution professional had invited bids for the property twice. While total eight entities had shown interest initially in the first instance, the second time when the bids were invited, Blackstone and a Bangalore-based realty developer had shown interest in acquiring the company. In a meeting held on Friday, the Committee of Creditors (COC) selected the private equity firm.
“Apart from the resolution plan, Blackstone’s proposal has also been preferred by lenders given its expertise in turning around companies globally. Following the approval from lenders, the proposal will now seek final approval from the bankruptcy court and this may take a few more days,” said one of the persons mentioned above.
The hotel company had landed in the bankruptcy courts after it defaulted on loans to many lenders, including Bank of Baroda and Punjab National Bank, Syndicate Bank and Bank of Maharashtra that totaled over Rs 900 crore. Including operational creditors, the dues now stand at over Rs 1,000 crore.
Blackstone has offered to repay all the creditors in a phased manner. This, ET has learnt, will include a one shot initial payment of Rs 350 crore. It will then bring in more capital, management expertise, technology and professionals to get the hotel’s operations on track and allow the property’s cash-flow itself manage further financial obligations.
The Resolution Professional — Subodh Agarwal — confirmed Blackstone’s selection by the lenders.
However, he declined to elaborate on the proposed acquisition further. Blackstone too declined to comment for the story.
Source: Economic Times