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A bankruptcy court in Mumbai has granted a 90-day extension for the revival of Lavasa Corporation following an application submitted by its resolution professional (RP). The planned city project is undergoing a renewed Corporate Insolvency Resolution Process (CIRP) after the National Company Law Tribunal (NCLT) ordered a restart due to the failure of the successful bidder to implement the approved resolution plan on time. The company has acknowledged liabilities exceeding INR 6,642 crore, while the previous bidder, Darwin Platform Infrastructure, had proposed a payment of INR 1,814 crore. The tribunal has reinstated Shailesh Verma as the RP, and the extension will be effective from the end of February 2025 until late May 2025. The RP highlighted that significant progress has been made in the revival process, with active engagement from potential bidders.
Construction firm HCC's real estate firm Lavasa Corporation is undergoing Corporate Insolvency Resolution Process (CIRP) and it has been granted an extension of 90 days for its revival process by a bankruptcy court. Advertisement
The planned city project entered CIRP following the directive from the National Company Law Tribunal (NCLT) to restart the entire process. This decision follows an application submitted by the Union Bank of India on behalf of secured creditors of Lavasa Corporation. The bank argued that the earlier successful resolution applicant, Darwin Platform Infrastructure Ltd, failed to execute the approved resolution plan within the required timeline, necessitating the revival of the resolution process.
Lavasa Corporation has declared liabilities over INR 6,642 crore, whereas the previous successful bidder, Darwin Platform Infrastructure, had proposed a payment of INR 1,814 crore.
The RP, through legal representation, informed the tribunal that substantial progress has already been achieved in the company's revival efforts. This includes the release of the Request for Resolution Plan (RFRP), the Information Memorandum (IM), and the Evaluation Matrix (EM), alongside productive discussions with potential bidders.
The RP further conveyed that potential resolution applicants (PRAs), being new entrants in the resolution process, have sought additional time to assess the necessary information before submitting their respective resolution plans.
The tribunal had previously instructed lenders to exclude the period from mid-July 2021 to early January 2022 from the resolution process. Additionally, the tribunal reinstated Shailesh Verma as the resolution professional (RP) of the company.
A division bench has now granted the RP's request for a 90-day extension, effective from late February 2025 until late May 2025.
Under NCLT, the resolution process is typically required to be completed within 180 days, with an additional 90-day extension permitted. However, the legal framework establishes 330 days as the ultimate deadline. If this timeline is exceeded, the company is usually placed under liquidation. However, in exceptional cases where significant progress has been made in the resolution process, the tribunal may grant further extensions to ensure a successful resolution.
Lavasa was established in 2000 by the Ajit Gulabchand-led Hindustan Construction Company (HCC) spanning 20,000 acres in the Mulshi and Velhe regions of Pune district, approximately 180 km from Mumbai. It was initiated as per Maharashtra government policy and regulations for new hill stations as India's first privately built smart city.
Lavasa made great progress in building key infrastructure, with over 2,200 apartments and villas, hotels and numerous city amenities and services, including an international convention centre. However, the project encountered numerous obstacles, including environmental violations and land acquisition disputes, which resulted in delayed payments to creditors. At the time of its insolvency admission, HCC held a 68.7% stake in Lavasa, while Avantha Group owned 17%, Venkateshwara Hatcheries 7.8%, and Vithal Maniar 6.3%.
Overall, the extension granted by the bankruptcy court provides additional time for the revival of Lavasa Corporation. Industry experts suggest that further extensions could be considered based on the progress achieved in the coming months.
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