Hyatt Regency in Mumbai, operated by Asian Hotels (West), will finally get to resume operations with the National Company Law Appellate Tribunal allowing its suspended promoters and other shareholders to bring in the money to pay off all dues owing to its creditors.

The deluxe hotel, valued at around ₹479 crore, stopped operations in 2021 hit by lockdowns and travel restrictions imposed in the wake of Covid. It was dragged to the bankruptcy court in September 2022 by the main lender YES Bank, which subsequently assigned the loan to JM Financial Asset Reconstruction, which later assigned it to UV Asset Reconstruction Company (UV ARC)

The promoters include Sandeep Gupta and his associates, Sudhir Gupta, and his wife, who collectively hold a 70 per cent stake. They were joined by a minority shareholder Robust Hotels (owned by the Saraf group), which has a stake of 18 per cent. They have deposited the dues of ₹361.7 crore which will be paid to all the outstanding creditors including the financial creditor UV ARC, to which the largest amount of ₹329 crore is owed.

The insolvency proceedings against the company have been closed, according to an order issued by NCLAT earlier this week.

Lots of twists

There have been a lot of twists and turns in the proceedings, with the committee of creditors led UV ARC shooting down the proposal made by the promoter groups and their associates. Their lawyer accused the ARC of trying to scuttle the proposal for its own motives. In its ruling, the NCLAT said, “We find substance in the submission of learned counsel for the appellant that the intent of UVARCL is to somehow take over prime prized asset of the corporate debtor, that is Hyatt Regency, Mumbai and hand over the assets to some prospective resolution applicant which is known to UVARCL only.”

It also observed that the decision of the CoC to not accept the proposal for payment of 100 per cent of the dues was “arbitrary and unsustainable.” While there were six resolution applicants who had expressed interest in the hotel, later on the promoters produced their own plan to infuse funds through a third party and settle the matter outside the bankruptcy court.