NCLT clears 423-cr resolution plan for Appu hotels

The Chennai National Company Law Court has approved the resolution plan presented by MK Rajagopalan, Chairman and CEO of MGM Healthcare Group, on the insolvency and bankruptcy case of Appu Hotels Ltd, which operates Le Meridien Chennai , Coimbatore and the Riverside Spa and Stations.

R Sucharitha, Member (Judicial) and Anil Kumar, Member (Technical), NCLT, Chennai, passed the order on July 15 based on an application filed by the Tourism Finance Corporation of India (financial creditor) on May 5 2020, initiating the insolvency resolution process regarding Appu Hotels (debtor). The list of financial and operational creditors was listed on December 14, 2020 and the fair value was 730.88 crore and the liquidation value was 569.33 crore. Interim Resolution Professional (Mukesh Kumar Gupta) received resolution plans from Madhav Dhir; MK Rajagopalan and Kotak Special Situations. Subsequently, Rajagopalan provided a detailed plan with a total consideration of the resolution plan being 423 crore, the Order said.

Objections filed

One of the opponents of the resolution plan was the suspended director / promoter (Palani G Periyasamy), who argued that there were several procedural shortcomings and misinformation in the conduct of the corporate insolvency resolution process that was precipitated and marred by procedural shortcomings and that the resolution requester does not have the necessary expertise to keep the debtor company in business.

It has further been argued that, according to the appraisal report prepared by BVe Consulting Engineers in 2019, the total value of the properties at replacement cost is 1,641 crore, which is four times the value proposed in the resolution plan. proposed by the resolution requester. It has also been argued that the fair value and liquidation value of the debtor company are respectively 724.98 crore and 565.05 crore and that this figure is undervalued and represents at least 33% of the assessment carried out by BVe Consulting Engineers in September 2019. Even taking into account the current situation of the Covid-19 pandemic and the resulting market shock, a 70% drop in the assessment of the debtor company is untenable and incredulous.

“Resolution Professional to finalize the additional line of action required to start the operation.” Accordingly, the application IA / 150 / CHE / 2021 (by Rajagopalan) is authorized. All other connected applications, as presented in the title of the case, are rejected, ”said the Order. Rajagopalan is the chairman of the Sri Balaji Educational & Charitable Public Trust and the Sri Balaji Vidyapeeth Trust, which runs the Mahatma Gandhi Medical College & Research Center (MGMCRI) established in Puducherry and the Sathya Sai Medical College in Kanchipuram.

MGM Healthcare, a 400-bed quaternary care hospital was established to enter the Chennai healthcare market in 2018.

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