The lenders to the real estate firm, Lavasa Corporation, have yet again extended the date for inviting bids for the firm to June 8, 2020, as bidders' interest has waned for real estate companies due to the ongoing coronavirus pandemic.
According to a source close to the development, there are no takers for the company as the fortunes of real estate firms have crashed due to the lockdown, resulting in zero sales for all real estate companies. “There is zero interest from buyers and banks don’t want to sell in a discount,” said a source close to the development. The company, on a consolidated basis, defaulted to loans worth Rs 7,700 crore.
According to an insider, as the IBC process will not be able to garner good offers and the company should not be sent for liquidation as all stakeholders will lose money in the process. “The lenders should look at a new solution outside of the NCLT (National Company Law Tribunal). The liquidation will not serve any purpose and bidders will give very low offers,” said a Lavasa official asking not to be quoted.
Several companies had earlier submitted their offers for Lavasa as a standalone entity in the previous rounds of sale. These included Delhi-based food major, Haldiram Snacks Pvt Limited, Pune-based builder, Aniruddha Deshpande, and UV Asset Reconstruction Company (UV ARC). Oberoi Realty, US-based fund Interups Inc, had also joined the race at a later stage.
“With real estate companies in a mess due to the coronavirus, they are not in an acquisition mode. Instead, they are looking to sell assets. The coronavirus pandemic has changed the outlook for the industry,” said an industry analyst.
Originally set up by HCC in 2000, Lavasa Corporation was built as a picturesque hill station near Pune in Maharashtra but defaulted to bank loans after the environment ministry issued halted the project in 2010. Since then, the city has turned into a ghost town with few tourists visiting it during week-ends. Several homeowners are either awaiting possession of their house, while several, who had received keys to their houses, have moved out.
In February this year, the NCLT permitted the lenders to sell Lavasa alongwith its 49 subsidiaries. This way, the lenders said, they would get a far better valuation.