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Creditors Choose Welspun for Troubled Lavasa Project
16 Feb
Summary
- Welspun-Ashdan consortium will acquire India's first private hill town.
- Creditors voted in favor of the consortium, with 92.21% approval.
- Lavasa project faced administration due to mounting debt issues.
Creditors have overwhelmingly chosen the Welspun-Ashdan consortium to acquire Lavasa Corp, marking a significant development for India's first privately developed hill town. The project had previously entered administration due to unmanageable debt.
The Welspun-Ashdan consortium, comprising Welspun subsidiary Paschim Sagar Properties and Ashdan Properties, secured an impressive 92.21% of the creditor votes. This strong backing came from most major creditors, excluding homebuyers.
Valor Estate, another bidder, faced rejection as Axis Bank, a significant creditor, did not approve its plan. This vote occurred amidst ongoing legal proceedings, including Valor's petition concerning alleged procedural irregularities.
The resolution professional proceeded with releasing the voting results based on a court order from January 29, which allowed the bankruptcy process to continue while reserving future considerations of committee of creditors' decisions.
The Welspun-Ashdan consortium's revised payment plan, promising completion within four years, was a key factor. Although Valor's bid was numerically higher on an NPV basis, Welspun's larger upfront cash commitment and perceived financial strength gave it an edge.
This decision sets the stage for the consortium to take control of the Lavasa project, pending any further legal challenges to the voting process.
