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The erstwhile promoters of Asian Hotels (West), the company which operates deluxe Hyatt Regency hotel in Mumbai, have roped in a shareholder with whom they propose to revive the hotel through funds infusion.
In consequence, they have sought to withdraw the hotel from the ongoing bankruptcy proceedings.
The five-star hotel, located opposite the international airport in Mumbai, lost business due to Covid-induced travel restrictions. It went into insolvency in September last year, as it was unable to pay its employees and vendors.
Around six applicants, including Pune-based Panchshil group and Sandeep Raheja’s K Raheja Realty, are said to have submitted resolution plans.
Last week, promoters Sandeep Gupta and Sudhir Gupta informed the resolution professional that they had entered into an agreement with Robust Hotels, which holds about 18 per cent stake in Asian Hotels (West), to revive the company and withdraw it from the bankruptcy court. They planned to pay, without haircuts, the admitted outstanding dues to lenders, operational creditors, and other creditors.
Once out of insolvency proceedings, the hotel would revive operations and regenerate employment, they said.
The total claims are just over ₹350 crore, of which financial creditors are claiming ₹292 crore. The bulk of the lenders’ claims is with UV Asset Reconstruction Company, assigned by lender YES Bank.
The promoters will have to file an application under Section 12A of the Insolvency and Bankruptcy Code (IBC), through the resolution professional, and it will be approved if more than 90 per cent of the creditors vote in favour.
Akshat Khetan, Founder of AU Corporate Advisory and Legal Services, said, “This move by the promoters is a welcome move as it fulfils the core objective of IBC... however the repayment schedule and modality of such repayments needs to be examined.”
Sonam Chandwani, Managing Partner at KS Legal & Associates, said that the out-of-court settlement would expedite proceedings. “It also underscores the determination of business leaders fighting ardently to preserve their ventures,” she added.
Khetan pointed out that in the face of unprecedented challenges, the hotel industry had shown a remarkable ability to adapt, evolve and thrive. “The revival is more than a return to normal; it’s a reimagining of what hospitality can be.”
Post Covid, the Indian hospitality sector has shown a huge growth surge. In the June quarter, average daily rate was up over 16 per cent on year, according to JLL India, while revenue per available room rose 15.4 per cent. From the current quarter onwards the pace is expected to pick up with festivals and corporate travel gaining momentum.
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