Rare Asset Reconstruction & Naman Group to take over Rajesh Lifespaces Hotel in Mumbai

All stakeholders of the Rajesh Lifespaces Group have approved of the take over their hotels in Mumbai by the Rare Asset Reconstruction Co. and Naman Group consortium. Earlier this month, lenders submitted the plan for approval to the National Company Law Tribunal (NCLT). The Rare-Naman Group partnership was the favoured bidder for lenders after making an upfront cash offer of Rs.461 crore and a further Rs.31 crore in equity.

Rajesh Business & Leisure Hotels owes Rs.621 crore to lenders, with ICICI Bank serving as the primary lender. It had partnered with Singapore's GHM Hotel to run a 316-room, five-star hotel at Kanjurmarg in Mumbai under the "The Chedi" brand. Due to a cash crisis, the company was unable to finish the project. Since 2019, the company has been identified on bank books as a non-performing asset (NPA). Without accounting for potential equity gains, the resolution plan predicts that lenders will recoup around 74% of their investment.

With Rs.331 crore, ICICI Bank has the highest exposure to the company, followed by Bank of Baroda (BoB) with Rs.162 crore and Union Bank of India with Rs.128 crore. Bank guarantees and external commercial borrowings are two ways that banks might make claims.

The two competing bidders were Sankalp Recreation of Ahmedabad and Shri Ram Multicom of Kolkata. Sankalp's bid, at Rs.533 crore, was the highest, but it included a delayed payment that would be made 300 days after the NCLT's decision. Additionally, Sankalp's financial situation did not make lenders confident.

Next (Sobha Limited’s share value drops in light of income tax raids)

Rare Asset Reconstruction & Naman Group to take over Rajesh Lifespaces Hotel in Mumbai

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