New Delhi, July 15 -- A consortium of investors led by the Mumbai-listed Oberoi Realty Ltd is set to acquire Juhu, Mumbai-based debt-laden Hotel Horizon Pvt Ltd for Rs 919 crore ($107 million), as part of a resolution plan under the country's bankruptcy law.

Oberoi Realty said in a stock exchange filing that a committee of creditors of Hotel Horizon had approved the consortium's resolution plan under the Insolvency and Bankruptcy Code (IBC), following which a letter of intent had been issued. The consortium comprises two other investors--Shree Naman Developers and JM Financial Properties.

The resolution plan will see the consortium pay Rs 919 crore, along with any unpaid dues, for the full and final settlement and outstanding claims and unpaid costs.

Oberoi Realty said that as part of the resolution plan, the consortium or a special purpose vehicle will acquire a 100% ownership of Hotel Horizon. The company said that the acquisition aligns with its business strategy.

Debt profile

Hotel Horizon owns a 7,500-square-meter plot of land in the upmarket Juhu area, overlooking the Arabian Sea. It is developing a retail-cum-hotel building.

The company, which was set up in 2004, went under in 2019. In January that year, the National Company Law Tribunal (NCLT) passed an order to appoint an interim resolution professional.

The company's secured financial creditors included two asset reconstruction companies, CFM Asset Reconstruction Pvt Ltd and JM Financial Asset Reconstruction Co Ltd, which had submitted claims of Rs 1,079 crore and Rs 756.39 crore, respectively.

This, along with claims by some other creditors and the income tax department, amounted to a total claim of Rs 1,928.34 crore, of which the NCLT approved a claim of Rs 1,656.19 crore. The final resolution amount of Rs 919 crore therefore comes at a little over 55% of the total approved claim amount, with the remainder of the claim effectively written off.

On Tuesday, Oberoi Realty was trading higher by 1.2% over its previous close, following the announcement of the resolution process.

Published by HT Digital Content Services with permission from VC Circle.