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Valor Estate, formerly DB Realty, has emerged as the highest bidder for Lavasa Corporation, offering INR 771.09 crore for the hill city project near Pune. The bid is part of an ongoing insolvency resolution process for the debt-laden project, which has over INR 6,642 crore in liabilities. The resolution plan is in draft stage, subject to environmental clearances. This marks the third attempt to resolve Lavasa's insolvency after previous bids failed. The Committee of Creditors will negotiate further to maximize the offer, with a 90-day extension invoked for final evaluation due to complexities.
Valor Estate, formerly DB Realty, has recently emerged as the highest bidder for a long-stalled hill city project. This development, impacting Lavasa Corporation near Pune, Maharashtra, is part of an ongoing insolvency resolution process. Valor Estate secured this position through a competitive bidding process. Advertisement
Valor Estate submitted a bid of INR 771.09 crore on a net present value (NPV) basis. This followed a competitive bidding process that involved ten rounds. Welspun Group was the second highest bidder with an INR 750 crore NPV offer, and Yogayatan Group submitted an INR 725 crore NPV bid.
Lavasa, once envisioned as India's first private hill city, encountered financial difficulties. These were due to regulatory delays, stalled construction, and mounting debts that exceeded INR 6,642 crore. The Corporate Insolvency Resolution Process (CIRP) was initiated under the Insolvency and Bankruptcy Code (IBC), 2016, after the company defaulted on its financial obligations.
The resolution plan for Lavasa Corporation is currently in the draft stage and is subject to change. A factor for the deal's finalization is the acquisition of environmental clearances, which lenders are cautious about due to past experiences. The complexities of Lavasa's land titles, pending regulatory approvals, and environmental concerns are also being addressed.
The current attempt to resolve Lavasa's insolvency is their third attempt. Earlier bids, including an INR 1,814-crore plan from Darwin Platform Infrastructure (DPIL) in July 2023, did not proceed due to non-payment of the upfront amount.
The Committee of Creditors (CoC) will engage in further negotiations with Valor Estate to maximize the value of the offer. The CoC will separately communicate the timeline for the final plan submission and proof of funding. The CoC recently invoked a 90-day extension to complete the bid evaluation, legal vetting, and final selection of a resolution applicant.
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