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The National Company Law Tribunal (NCLT) has approved a debt resolution plan worth Rs. 990 crore for a unit of Sare Homes submitted by a consortium consisting of KGK Realty and Dhoot Infrastructure. KGK Realty holds a 74% stake in the consortium, while Dhoot Realty holds a 24% stake.
Sare Gurugram Private Limited, the unit of Sare Homes that defaulted on its dues to creditors and failed to complete the construction of a promised township located on the outskirts of Delhi, received the resolution plan from the consortium.
The KGK Realty and Dhoot Infrastructure consortium outbid five other bidders, including Alpha Corp, Signature Global, and high net worth individuals Nikhil Jain, Sunil Kumar Jain, and Sumeet Nanda, for the debt resolution plan.
At the time the company was admitted for bankruptcy, it had racked up claims worth Rs 1,100 crores from home owners and another Rs 1,000 crore in claims from financers. According to the approved plan, the homeowners will receive possession of their apartments within 36 months.
On March 9, 2021, NCLT admitted Sare’s Gurugram unit for bankruptcy. Ajit Gyanchand Jain was appointed as the resolution professional, and Khaitan and Co.'s partner Siddharth Srivastava served as his legal advisor. PwC acted as his financial advisor.
KKR, Altico Capital, and Edelweiss initially provided funding for the company, which was developing a 47-acre township, but they subsequently sold their loans. Assets Care and Reconstruction Enterprise (ACRE), Alchemist Asset Reconstruction Company, and Bank of India are amongst its existing financial creditors.
The resolution plan's approval is a significant development for the company, as it will enable it to complete the construction of the township and repay its creditors. The consortium's bid was accepted over several other bidders, demonstrating the quality and feasibility of their proposal.
Furthermore, the resolution plan will enable homeowners to obtain possession of their apartments within three years, which is a significant relief for them. Additionally, it will boost investor confidence in the real estate sector by demonstrating that debt resolution is a viable option for resolving bankruptcy cases.
Overall, the NCLT's approval of the debt resolution plan for Sare Gurugram Private Limited is a positive development for the company, its creditors, and homeowners. The resolution will help the company complete its project, repay its creditors, and deliver homes to its customers. The real estate sector can also benefit from this development, as it demonstrates that debt resolution is a feasible alternative for resolving bankruptcy cases.
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