Creditors of the financially troubled Lavasa Corporation have opted to prolong the resolution timeline, allowing bidders another opportunity to enhance their bids for the real estate project. This extension was prompted by Valor Estate, which submitted an improved proposal after the initial deadline, according to sources familiar with the situation.
Lenders plan to reconvene on Friday to determine the new deadline for all bidders, likely extending it by two months from the original August 29 deadline, they indicated.
“Following extensive discussions, the lenders have agreed that the Valor bid should be considered, necessitating another chance for other bidders to adjust their offers. The new bidding timeline will be finalized at the lenders’ meeting on Friday,” shared one anonymous source.
Mumbai’s Yogayatan Group had positioned itself as the top bidder for Lavasa Corporation with a net present value (NPV) bid of Rs 795 crore, surpassing Welspun’s Rs 776 crore bid and Valor Estate’s Rs 771 crore proposal from late last month. These were updated offers following the first bidding round earlier this month.
However, Valor Estate, which did not submit a revised bid initially, expressed its intent to raise its offer after the final bids were disclosed. The Mumbai-based company has now proposed to increase its bid to Rs 806 crore on an NPV basis.
A spokesperson for Valor Estate stated, “According to the process guidelines, bids submitted under the Challenge Process were intended to be final and binding. We complied with these regulations, but other bidders were permitted to revise their bids after our figures became public, leading to an uneven playing field. While we have not received any formal notice regarding a rebid, we believe corrective measures are required to ensure transparency and fairness for all bidders.”
One of the aforementioned sources mentioned that lenders planned to put all bids to a vote starting August 4, but Valor Estate’s late submission complicated the process. “From the lenders’ standpoint, they wish to avoid future litigation while maximizing their recovery, so they will allow everyone another chance to adjust their offers, and a petition to the NCLT (National Company Law Tribunal) will also be made to extend the resolution timeline,” the source noted.
This decision to extend the bidding deadline has sparked discontent among other participants.
“Reopening bids simply because one bidder wants to raise their offer undermines the integrity of the bidding process. We may choose not to engage in the next round,” remarked an anonymous bidder.
Homebuyers have also voiced their opposition to the extension, emphasizing that the resolution process has already spanned seven years. “Allowing revisions after the deadline makes the entire CIRP (corporate insolvency resolution process) arbitrary, promoting delays and fostering an environment for certain non-compliant resolution applicants to stall the revival of Lavasa,” stated homebuyers in a letter to the resolution professional.
Inquiries sent to EY-backed resolution professional Udayraj Patwardhan went unanswered.
Union Bank of India leads as a creditor, holding 12% of the total dues. Phoenix ARC follows as the second-largest creditor, owning almost 11% of the debt, which it acquired from L&T Finance in 2023, right before the NCLT approved DPIL’s plan in July 2023. Another loan aggregator, Arcil, also holds over 10% of the debt, with Bank of India and Axis Bank both securing more than 8% each.
Lavasa Corporation was envisioned as India’s first privately constructed and managed city at the dawn of the millennium, catering to affluent residents from Mumbai and Pune seeking refuge from urban chaos and pollution. Modeled after the Italian fishing village of Portofino, it was designed as a gated community featuring a golf course, rowing facilities, and even a football academy. Unfortunately, it faced bankruptcy and was admitted for insolvency in 2018.
