NCLT Asks Lavasa Lenders To Go For Equitable Distribution Of Sale Proceeds

India’s National Company Law Tribunal (NCLT) directed Lavasa Corporation Ltd.’s lenders to consider the equitable distribution of proceeds from the sale of the company and its units to Darwin Platform Infrastructure Ltd.

The tribunal granted two weeks to the winning bidder Darwin Platform for submission of a modified or fresh resolution plan for the bankrupt township developer, according to the NCLT’s order. It also directed Lavasa’s Resolution Professional Shailesh Verma to place the revised resolution plan before the consolidated committee of creditors for their consideration.

The order was passed by the division bench of the NCLT, comprising retired Justice P.N. Deshmukh, also a judicial member of the tribunal, and Technical Member Shyam Babu Gautam on 9 February.

Darwin Platform’s resolution plan offered to pay a total of 1,601.58 crore rupees ($193.94 million) against the total claim amount of 7,965.30 crore rupees.

The revival plan for Lavasa provided 20.5% of the claimed amount to secured creditors, while the same was 0.05% in the case of government dues, 0.45% for general (including vendor claims) and electricity dues, and 0.11% for homebuyers.

“Since the secured financial creditors have been provided with 20.50% of the amount claimed, it is directed that the government and other statutory dues be treated in the same manner and proportion in any subsequent revised plan that may be submitted by the resolution applicant,” the NCLT said in its order.

Set up in 2000 by the Ajit Gulabchand-led HCC Group, Lavasa was developing the country’s first privately developed city spread over 20,000 acres in the Mulshi and Velhe areas in Pune district of Maharashtra state in western India. However, the project got entangled in various issues, including environmental violations and land acquisition.

Lavasa owed more than 6,200 crore rupees to its financial creditors and over 400 crore rupees to about 840 homebuyers when the company was admitted into insolvency resolution in August 2018.

(Note: $1 = 82.5798 Indian rupees)

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