MUMBAI: The National Company Law Tribunal (NCLT) has rejected the ₹1,080 crore bid from Brookfield-backed Chronos Properties for the acquisition of Infrastructure Leasing and Financial Services Ltd (IL&FS)’s flagship Bandra Kurla Complex property.
On November 28, the NCLT’s Mumbai Bench dismissed Chronos’s application to enforce its bid for the IL&FS Financial Centre located at BKC.
The tribunal upheld IL&FS’s right to amend the transaction consideration. It confirmed that the Letter of Intent (LoI) dated March 21, 2022, is a binding contract between the parties, but noted that it includes provisions allowing IL&FS to unilaterally modify the agreement, including financial terms, under the court-approved resolution framework.
Moreover, the tribunal validated IL&FS’s letter dated August 16, 2024, which upgraded the bid amount from ₹1,080 crore to ₹1,481 crore, ruling it cannot be annulled.
The NCLT referenced new valuation reports submitted by IL&FS, indicating a fair-market value for the property at approximately ₹1,722 crore. The adjustment of the transaction value is seen as aligned with the objective of value maximization as mandated during the resolution process.
Regarding the performance guarantee, the tribunal noted that no immediate disqualification was warranted since IL&FS had not set a renewal deadline. Chronos has indicated its intent to deposit the guarantee with the NCLT.
The tribunal instructed Chronos to submit the performance guarantee (demand drafts totaling 10% of the bid) within 30 days; otherwise, disqualification under the Request for Proposal (RFP) terms would ensue.
Previously, on June 26, IL&FS petitioned the NCLT to annul Chronos’s ₹1,080 crore bid for the BKC property, claiming disqualification and non-compliance with bidding requirements. IL&FS asserted that a Brookfield affiliate was obliged to maintain a performance guarantee until definitive agreements were executed.
IL&FS reiterated the necessity for ‘value maximization’ as a key aspect of the public interest board’s mandate under the court-supervised resolution framework and urged Brookfield to adjust its bid in alignment with the updated valuation.
In response, Brookfield Asset Management stated that the NCLT found the LoI to be a concluded contract between the parties. They plan to seek remedies, including potential appeals, regarding IL&FS’s unilateral changes to the purchase consideration.
