The settlement of a six-year long dispute between McDonald’s India and Vikram Bakshi may soon be reached after an appellate tribunal advised state-owned infrastructure finance firm Hudco to accept a debt settlement offer from Bakshi and drop its opposition to the deal.
Bakshi has sold his stake in Connaught Plaza Restaurants (CPRL), a joint venture between him and McDonald’s India for the burger chain’s operations in north and east India, as part of their dispute settlement.
Hudco, which is proceeding against Bakshi over personal guarantees on loans to his hospitality business Ascot Hotels, intervened, pointing to an order by the Debt Recovery Tribunal (DRT) preventing Bakshi from selling any shares in CPRL.
The National Company Law Appellate Tribunal (NCLAT) has, however, indicated that a Rs 10 crore deposit by Bakshi towards claims by Hudco may be enough to satisfy DRT to lift its stay on selling his stake in CPRL. DRT had directed Bakshi to pay Rs 195 crore to Hudco in the matter.
“The interim order may have become infructuous if they (DRT) say don’t sell these shares and they (Bakshi) pay the amount of sale proceeds of the shares for the purpose of adjusting it with the decretal amount,” a two-member bench of NCLAT led by Justice SJ Mukhopadhaya said on Wednesday.
Instead, the bench advised the counsel for Hudco to accept the settlement offer by Bakshi and, if needed, proceed for the remaining amount through DRT.
Earlier, Bakshi’s counsel Amit Sibal had submitted before the bench that his client had deposited Rs 10 crore — the entire proceeds from the sale of his shares in CPRL — to DRT and that the amount had already been withdrawn by Hudco. Sibal also said Bakshi was set to propose a onetime settlement to Hudco of Rs 137 crore against the initial disbursement of Rs 62.38 crore to Ascot Hotels.
People close to the development told ET that the proposed settlement includes around Rs 61 crore of interest that has already been paid to Hudco during the loan tenure. This would bring the value of the proposed settlement to around Rs 76 crore against Rs 195 crore that the DRT has directed Bakshi to pay to Hudco.
Sources said the final settlement amount would be contingent on Hudco closing all claims against Bakshi. NCLAT has directed Sibal to submit details of the amount Bakshi and his wife Madhurima Bakshi received pursuant to the settlement with McDonalds’ India, the total amount he has been directed to pay Hudco by DRT, the amount he has already paid Hudco, and the settlement amount he proposes to pay Hudco.
