Lenders cancel bankruptcy proceedings against Lavasa Corporation, to invite new bids: Report

The lenders of realty firm Lavasa Corporation, who had earlier initiated bankruptcy proceedings, have now cancelled as they did not receive good bids, Business Standard said in a report.

Citing a banking source, the report added that the National Company Law Tribunal (NCLT) has ordered the consolidation of bankruptcy proceedings against all subsidiaries of Hindustan Construction Company (HCC) Ltd. along with Lavasa Corporation and, therefore fresh bids will be called.

In 2018, the NCLT had admitted a plea filed by operational creditors who initiated Corporate Insolvency Resolution Process (CIRP) against Lavasa Corporation under the lnsolvency and Bankruptcy Code (IBC).

Lenders have Rs 7,700 crores as bad debts in the company, according to the report. Since the initiation of IBC proceedings against the company, it has missed several deadlines prescribed in the act.

Moneycontrol could not independently verify the same.

Lavasa was initiated as per Maharashtra's government policy and regulations for new hill stations as India's first privately built smart city.

Lavasa has made substantial progress in building substantial infrastructure, over 2,200 apartments and villas, hotels and numerous city amenities and services, including an international convention centre.

HCC said the project was severely impacted by a Ministry of Environment notification to stop work for jurisdictional reasons and not for environmental infractions.

[Inputs from PTI]