Curation Team
Axis Bank is the first creditor off the block to seek buyers for its stuck exposure to the debt-laden Lavasa Corp as other lenders weigh their options in light of the litigation-dogged resolution process.
On Monday, Axis put its ₹ 511 crore claims for sale at a ₹80 crore reserve price on an all-cash basis. The private sector lender which is the fifth largest creditor to the bankrupt private hill city, has called for expressions of interest (EoIs) from asset reconstruction companies (ARCs), non banking finance companies (NBFCs) and other financial institutions to purchase the debt.
The last date for submission of documents is set for November 18 followed by electronic auctions on November 21.
“Axis has made the move, while others are still contemplating. Maybe, they will wait for how the interest is for Axis and then take a call. But clearly there is little optimism among lenders that recovery from this process will happen soon,” said a person aware of the issue.
Axis Bank did not reply to an email seeking comment.
Creditors to Lavasa, led by the Union Bank of India, have been struggling with its bankruptcy process since 2018. The company was first admitted to bankruptcy due to environmental issues and lack of crucial clearances by the government. Lavasa owes creditors a total of ₹ 6,642 crore.
This is the third process being run by lenders after the first search for a buyer was abandoned due to the Covid pandemic in 2020. In 2021, Darwin Platform Infrastructure (DPIL)’s ₹1,814 crore plan was approved by lenders and finally approved by the NCLT in July 2023. But that plan collapsed after DPIL failed to complete its promised payments within the timeline.
The current process was started in September 2024 but has been contested hotly with three bidders namely, Valor Estates, Welspun-Ashdan Developers consortium and Mumbai based Yogayatan Group competing for the asset.
Valor Estates, Welspun-Ashdan and an individual named Anuj Goyal have all formed different interlocutory applications (IAs) in the Mumbai National Company Law Tribunal (NCLT) either seeking to be allowed to revise resolution plans, disqualification of rivals or to be allowed to modify payment timelines.
“All these petitions are pending hearings and will take weeks to be completed. It is in this context that lenders are looking for alternatives to exit this case since it’s been more than seven years that this case has been going on,” said the person cited above. The next hearing is on November 5.
