A bankruptcy court approved Macrotech Developers’ acquisition of Mumbai-based V Hotels Ltd, owner of Tulip Star, earlier known as the iconic Centaur Hotel.
Lodha Group-owned Macrotech Developers is paying around Rs 890 crore to acquire the hotel property in Juhu, an affluent suburb in western Mumbai. The bankrupt hotel company had admitted liabilities of over Rs 2,500 crore.
Financial lenders of V Hotels had in June 2023 approved Macrotech’s resolution plan with all voting in its favour. Other bidders included Oberoi Realty, GHV (India), and K Raheja Corp Real Estate.
The Lodha Group company’s resolution plan proposes to pay upfront Rs 78 crore to secured financial creditors of V Hotels. The remaining amount will be paid in two tranches of Rs 405 crore each, on or before 210 days and 270 days from the closing date.
Ahead of the tribunal’s approval of the resolution plan, the company’s resolution professional Anish Niranjan Nanavaty informed through senior advocate Pradeep Sancheti and counsel Pulkit Sharma that in 2002, V Hotels had acquired Centaur Hotel Juhu Beach from Hotel Corporation of India under the government’s disinvestment programme.
Advocate Rohit Gupta appeared for Macrotech.
“For hotel companies facing insolvency resolution processes, those with better locations always have brighter chances to attract more resolution applicants,” said Ashish Pyasi, partner of law firm Aendri Legal. “In this case, the location is one of the primary reasons many bidders threw their hats in the ring to acquire this.”
The hotel has a 6.1-acre land parcel on Juhu Tara Road in Mumbai’s western suburb Vile Parle. The existing development has around 367 keys with restaurants, large banquets, and a small retail component. However, the hotel is currently non-operational.
The land parcel in Juhu can be used for redevelopment of any other asset class including residential, commercial, retail, or a combination of these.
In addition to the hotel property and land parcel in Juhu, V Hotels also owns 11 residential apartments in the western suburbs of Mumbai.
The account of Tulip Star Hotels was declared non-performing on December 1, 2008. Bank of India, which had led a consortium of lenders to the company, assigned its receivables to the asset reconstruction company on December 31 of the same year.
The insolvency resolution process in respect of the company was commenced under an order passed by the National Company Law Tribunal (NCLT), Mumbai bench on May 31, 2019. This order was challenged before the National Company Law Appellate Tribunal (NCLAT).
The NCLAT had set aside the NCLT order and restored the company to its board of directors, in December 2019. This NCLAT order was further appealed before the Supreme Court, and the apex court set aside the NCLAT order in August 2022 and consequently, the CIRP order passed by the NCLT was restored and was allowed to undertake the resolution process.
A total of 68 claims worth over Rs 9,621 crore were received under the resolution process and of these, 61 claims from secured, unsecured, and operational creditors worth over 2,501 crores were admitted.
In the case, Asset Reconstruction Company Ltd (ARCIL) had acquired debt from Bank of India, Bank of Baroda, Union Bank of India, Punjab National Bank. While Pegasus Asset Reconstruction with assignments from Canara Bank and Indian Bank apart from Cox & Kings were among key creditors to the hospitality company.
