The promoters, who operate the Hyatt Regency hotel near Mumbai airport, offered to pay the entire claims of lenders, trade creditors, employees and government dues, but the plan was rejected by the largest lender – UV Asset Reconstruction Company (ARC).
In an order passed on January 9, the National Company Law Appellate Tribunal (NCLAT) approved the promoter’s plan and said the lenders’ decision to reject it was “arbitrary and unsustainable”.
The promoters – Sandeep Gupta, Sudhir Gupta and Robust Hotels, who jointly hold 88% equity – have offered to pay upfront the entire claims amounting to ₹361.6 crore.
Legal experts said tribunals have rarely gone against a decision taken by majority lenders considering a landmark Supreme Court order in the Essar Steel case, which held that the commercial decision of the committee of creditors is not open for judicial review.
The NCLAT approved the plan under section 12A of the Insolvency and Bankruptcy Code, which allows defaulting promoters to come up with a resolution plan. It directed the resolution professional (RP) to distribute 100% of all creditors’ dues. UV ARC has 98.8% debt while PTC India Financial Services has 1.2%.Asian Hotels (West) debt has witnessed a series of transactions in the last two years. Yes Bank, with 98% debt, sold its entire Rs 282 crore loan for upfront cash at an unchallenged Swiss auction to J M Financial ARC in June 2022. Most ARCs were unaware about the Yes Bank proposed Swiss auction to sell Asian Hotels (West) loans, as reported by ET earlier.The NCLT admitted the hotel to corporate insolvency in September 2022. Within three months, J M Financial ARC sold the entire debt to UV ARC for upfront cash payment.
Yes Bank, the original creditor, had valued the company at Rs 479.07 crore, according to the NCLAT order.
The promoter gave a settlement offer on August 11, 2023, along with a Rs 40 crore bank guarantee. The offer was not considered since lenders wanted to verify the origin of the bank guarantee given by Kotak Mahindra Bank and IDBI Bank.
