Lavasa hill city hits dirt; lenders may send company to liquidation

Lavasa, a subsidiary of construction major HCC, has defaulted on bank loans worth Rs 7,700 crore

Lavasa Corporation was set up as a picturesque hill station near Pune in Maharashtra in 2000 but defaulted to bank loans after the environment ministry issued a stop work order to the project in 2010.

Lenders to Lavasa Corporation are making a last-ditch effort to attract bidders for the eponymous hill city near Pune, seeking final bids before November 20. If the project fails to attract any bidders, then lenders will to send the company to liquidation. “Several bidders, who had earlier shown interest, are now backing out. With a slowdown gripping the real estate industry, the bidders want to take less risk in the project,” said a banker close the development. The Reserve Bank of India’s diktat to keep the ARCs (asset reconstruction corporation) out of insolvency ...