NCLT okays first resolution plan in realty; Oasis to invest in Vishwakarma

The Chennai Bench of the National Company Law Tribunal (NCLT) has approved a resolution plan of Oasis Grace Engineering Projects for Vishwakarma Real Estates & Constructions. This makes the first instance of a real estate firm getting a resolution plan approved by the NCLT. 

Vishwakarma Real Estates & Constructions defaulted around Rs 68 crore to bankers, including ICICI Bank, ICICI Home Finance Company, and Canara Bank. 

The insolvency application was filed by financial creditor North Town Estates and the process was initiated through an order on April 6, 2018. The authorised representative for homebuyers was also appointed as part of committee of creditors, with a 41.66 per cent voting share.

Under the resolution, there are two plans — one was proposed by Oasis Grace Engineering Projects, the Indian arm of Oman-based Oasis Grace, and the other was submitted by Care Promoters Chennai, the local partners of Oasis Grace. Oasis Grace will put in Rs 13 crore to address the costs, liabilities and claimis of the creditors, including Rs 11 crore, which is 50.50 per cent of the total liability of ICICI Bank and ICICI HFC.

According to the plan, Canara Bank will take a haircut of 75 per cent and will receive Rs 1.5 crore from Care Promoters Chennai. Under the second plan, Care Promoters Chennai has proposed to bring in Rs 5.55 crore. However, both the banks have secured assets that they can use to recover the exposure, said a person in the know. Meanwhile, financial creditors, who are individuals, are taking a haircut of almost 75 per cent. 

With the resolution plan, 97 homebuyers will be getting the homes they booked -the project will be completed by the successful bidder — by paying the balance amount of around Rs 7 crore to them. The rental, salaries, and other contingencies will be paid by both the companies.

“If this is executed as per plan submitted, this would be the first successful resolution in the real estate sector. Lots of cases are pending in the Supreme Court, while many  have gone for liquidation,” said Pathukasahasram Raghunathan Raman, who was a resolution professional for the insolvency resolution process.

Sanjay Chugh, head of Chennai branch of Anarock Property Consultants, said the NCLT's okaying the resolution plan would boost the confidence in the sector.

ICICI Bank moves NCLAT on Jaypee

 

ICICI Bank on Monday approached the National Company Law Appellate Tribunal, seeking a direction to NCLT Allahabad to hear urgently its insolvency plea against Jaiprakash Associates and pass the order without any further delay. Source: PTI