Realty developer Valor Estate, formerly DB Realty, has emerged as the highest bidder for Lavasa Corporation with an offer of ₹771.09 crore on a net present value (NPV) basis, as part of the ongoing insolvency resolution process for the debt-laden hill city project near Pune, said people familiar with the development. Bids were invited under the 'challenge process' of the Corporate Insolvency Resolution Process (CIRP), which concluded on Tuesday.
"The highest bidder was selected after a frenzied total of 10 bidding rounds," said one of the persons mentioned above. "The committee of creditors (CoC) will negotiate further with the applicant to maximise the value. The timeline for final plan submission and proof of funding will be shared separately."
Other bidders in the fray included Welspun Group, Lodha Developers, Pride Purple Group, Jindal Steel & Power Group, and the Yogayatan Group. Welspun Group's ₹750 crore offer came second, while Yogayatan Group's bid was valued at ₹725 crore, based on NPV, which estimates a project's future profitability by discounting expected payments. ET could not ascertain the gross value of the bids. The CIRP for Lavasa was initiated under the Insolvency and Bankruptcy Code (IBC), 2016, after the company defaulted on its financial obligations. Lavasa, once pitched as India's first private hill city, slipped into financial distress amid regulatory delays, stalled construction, and mounting debts that eventually crossed ₹6,642 crore.
As part of CIRP, the CoC had invited resolution plans from potential suitors to either revive the company or recover dues through sale of assets. This is the third major attempt to resolve Lavasa's insolvency, after previous bids, including a ₹1,814-crore plan approved in July 2023 from Darwin Platform Infrastructure (DPIL), failed due to non-payment of the upfront amount.
"Though Valor has won the open challenge round, its bid, like those of most other bidders, is subject to the project getting environmental clearance (EC) which may not find favour with lenders. Since the last time banks had a bad experience, this time they will be more cautious, so the process is far from over now," a second person said. The tribunal allowed revival of the resolution process and let CoC to exclude the period from July 13, 2021, to January 3, 2022, from the resolution process.
The process mandates a time-bound resolution, typically 180 days, extendable by another 90 days under exceptional circumstances. "The resolution plans are only at the draft stage and could be subject to change. Creditors will of course have their say," a third person said, adding that CoC is likely to meet later this week to decide on the future course of action.
ET's email queries to EY-backed resolution professional Udayraj Patwardhan, Valor Estate, and process advisor to lenders BoB Capital Markets remained unanswered.
In the backdrop of the complexity of Lavasa's land titles, pending regulatory approvals, and environmental concerns, the CoC recently invoked a 90-day extension to complete bid evaluation, legal vetting, and final selection of a resolution applicant. Valor's acquisition may mark a turning point in Lavasa's prolonged insolvency matter, reviving hopes for the stalled project's completion and eventual handover to homebuyers and creditors.
"The highest bidder was selected after a frenzied total of 10 bidding rounds," said one of the persons mentioned above. "The committee of creditors (CoC) will negotiate further with the applicant to maximise the value. The timeline for final plan submission and proof of funding will be shared separately."
Other bidders in the fray included Welspun Group, Lodha Developers, Pride Purple Group, Jindal Steel & Power Group, and the Yogayatan Group. Welspun Group's ₹750 crore offer came second, while Yogayatan Group's bid was valued at ₹725 crore, based on NPV, which estimates a project's future profitability by discounting expected payments. ET could not ascertain the gross value of the bids. The CIRP for Lavasa was initiated under the Insolvency and Bankruptcy Code (IBC), 2016, after the company defaulted on its financial obligations. Lavasa, once pitched as India's first private hill city, slipped into financial distress amid regulatory delays, stalled construction, and mounting debts that eventually crossed ₹6,642 crore.
As part of CIRP, the CoC had invited resolution plans from potential suitors to either revive the company or recover dues through sale of assets. This is the third major attempt to resolve Lavasa's insolvency, after previous bids, including a ₹1,814-crore plan approved in July 2023 from Darwin Platform Infrastructure (DPIL), failed due to non-payment of the upfront amount.
"Though Valor has won the open challenge round, its bid, like those of most other bidders, is subject to the project getting environmental clearance (EC) which may not find favour with lenders. Since the last time banks had a bad experience, this time they will be more cautious, so the process is far from over now," a second person said. The tribunal allowed revival of the resolution process and let CoC to exclude the period from July 13, 2021, to January 3, 2022, from the resolution process.
The process mandates a time-bound resolution, typically 180 days, extendable by another 90 days under exceptional circumstances. "The resolution plans are only at the draft stage and could be subject to change. Creditors will of course have their say," a third person said, adding that CoC is likely to meet later this week to decide on the future course of action.
ET's email queries to EY-backed resolution professional Udayraj Patwardhan, Valor Estate, and process advisor to lenders BoB Capital Markets remained unanswered.
In the backdrop of the complexity of Lavasa's land titles, pending regulatory approvals, and environmental concerns, the CoC recently invoked a 90-day extension to complete bid evaluation, legal vetting, and final selection of a resolution applicant. Valor's acquisition may mark a turning point in Lavasa's prolonged insolvency matter, reviving hopes for the stalled project's completion and eventual handover to homebuyers and creditors.
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