Lavasa Corporation To Face Insolvency
Hindustan Construction Company Ltd.’s real estate firm Lavasa Corporation will face insolvency proceedings, with the National Company Law Tribunal admitting plea of lenders of the debt-ridden realty firm.
Lavasa Corporation is developing a hill city 'Lavasa' near Pune in Maharashtra.
In a filing to the BSE yesterday, HCC said the NCLT has admitted a plea filed by operational creditors who initiated Corporate lnsolvency Resolution Process against Lavasa Corporation under the lnsolvency and Bankruptcy Code.
NCLT appointed Devendra Prasad as interim resolution professional.
“Lavasa is a very special urban development project and an initiative well ahead of its time. While shareholders' interests have been sacrificed, we are hopeful that the pioneering efforts to grow Lavasa into a thriving smart city will now find stewardship in the hands of a new owner, enabled by NCLT,” HCC Director and group Chief Executive Officer Arjun Dhawan said.
A swift resolution through IBC would benefit all stakeholders, especially customers, who have patiently supported Lavasa through this tumultuous period, he added.
Lavasa Corporation Ltd is promoted by HCC which has 68.7 percent percent stake in the corporation. Avantha Group has 17.18 percent per cent stake, while Venkateshwara Hatcheries has 7.81 percent stake and Vithal Maniar owns 6.29 percent stake in the embroiled corporation.
Lavasa was initiated as per the Maharashtra's government policy and regulations for new hill stations as India's first privately built smart city.
Lavasa has made substantial progress in building substantial infrastructure, over 2,200 apartments and villas, hotels and numerous city amenities and services, including an international convention centre.
HCC said the project was severely impacted by a Ministry of Environment notification to stop work for jurisdictional reasons and not for environmental infractions.
“The consequent delay of 1.5 years in obtaining clearances affected the project and brand Lavasa in many ways. Operations slowly came to a stand-still due to paucity of working capital and caused Lavasa’s investors and partners to also step back or defer their investment plans,” HCC said.
A resolution plan was submitted to revive the Lavasa project, but same was not accepted by the lenders, the company said.