SevenHills Healthcare’s fresh resolution process begins, EoIs invited

SevenHills Healthcare was first admitted for CIRP proceedings in March 2018 by the National Company Law Tribunal’s (NCLT) Amaravati bench at Hyderabad after Axis Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016. (Representative image)

SevenHills Healthcare Pvt Ltd is undergoing a fresh corporate insolvency resolution process (CIRP) after the earlier resolution was mired in a prolonged legal battle with the Municipal Corporation of Greater Mumbai (MCGM) and the delay due to the pandemic.

Lenders have invited fresh expressions of Interest (EoIs) from January 6 to January 31 for the resolution of the bankrupt company, which has a 1,500-bed hospital in Mumbai and a 303-bed hospital in Visakhapatnam.

SevenHills Healthcare was first admitted for CIRP proceedings in March 2018 by the National Company Law Tribunal’s (NCLT) Amaravati bench at Hyderabad after Axis Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016.

The Tribunal appointed Abhilash Lal as the resolution professional for the insolvency proceedings. The committee of creditors (CoC) in September 2018 approved a resolution plan of Dr Shetty’s New Medical Centre, which proposed to infuse Rs 1,002 crore of fresh equity into SevenHills Healthcare. The plan was later approved by the NCLT in July 2019.

However, it could not be implemented as MCGM challenged the approval order claiming that it is the owner of the land on which SevenHills Healthcare’s hospital in Andheri, Mumbai, was constructed. The National Company Law Appellate Tribunal (NCLAT) confirmed the approval order of NCLT in August 2019, which was challenged by MCGM before the Supreme Court.

The apex court in November 2019 set aside the approval order of NCLT Amaravati and the NCLAT order on the ground that MCGM’s approval was required in terms of the Mumbai Municipal Corporation Act 1882 before approval of the plan by the NCLT.

Taking into consideration the apex court’s orders, the NCLT Amaravati bench granted an extension of the CIRP period and asked the resolution professional to conduct a fresh resolution process. However, the Mumbai hospital of SevenHills Healthcare was declared a dedicated Covid-19 hospital under the Disaster Management Act 2005 by the Maharashtra government and was since then being used by MCGM as a Covid-19 quarantine and treatment facility.

Taking this into account, the NCLT Amaravati bench further extended the CIRP period till the time MCGM continues to use the Mumbai hospital as a dedicated Covid-19 centre.