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The National Company Law Tribunal, Chennai, has approved the Resolution Plan submitted by MK Rajagopalan, Chairman and Managing Director 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 Resorts.
R Sucharitha, Member (Judicial) and Anil Kumar, Member (Technical), NCLT, Chennai, passed the order on July 15 based on an application filed by Tourism Finance Corporation of India (financial creditor) on May 5, 2020, initiating the corporate insolvency resolution process in relation to Appu Hotels (debtor). The list of financial and operational creditors were listed as on December 14, 2020 and fair value was at ₹730.88 crores and liquidation value at ₹569.33 crore. The 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 crores, the Order said.
Objections filed
One of the objectors to the Resolution Plan was the suspended Director / Promoter (Palani G Periyasamy), who contended that there were several procedural lacunae and misinformation in the conduct of the Corporate Insolvency Resolution Process which was rushed and marred with procedural inadequacies and that the Resolution Applicant lacks the expertise to keep the Corporate Debtor as a going concern.
It was further submitted that according to the valuation report prepared by BVe Consulting Engineers in 2019, the total value of the properties at Replacement Cost amounts to ₹1,641 crore, which is four times the value proposed in the Resolution Plan proposed by the Resolution Applicant. It was also submitted that the fair value and liquidation value of the Corporate Debtor is ₹724.98 crore and ₹565.05 crore respectively and the said figure is undervalued and is at least less than 33 per cent of the valuation done by BVe Consulting Engineers in September 2019. Even by taking into account the prevailing Covid - 19 pandemic situation and the market shock caused as a result of the same, a 70 per cent fall in valuation of the Corporate Debtor is untenable and incredulous.
“Resolution Professional to finalise the further line of action required for starting of the operation. Accordingly, the Application IA / 150 / CHE / 2021 (by Rajagopalan) stands allowed. All other connected Applications, as arrayed in the cause title, stands dismissed,” the Order said. Rajagopalan is the chairman of the Sri Balaji Educational & Charitable Public Trust and Sri Balaji Vidyapeeth trust, which runs the Mahatma Gandhi Medical College & Research Centre (MGMCRI) established in Puducherry and Sathya Sai Medical College in Kanchipuram.
MGM Healthcare a quaternary care 400 bedded hospital was established to enter the Chennai healthcare market in 2018.
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