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The interim resolution professional (IRP) has invited Expression of Interest to submit resolution plan for the hospitality chain Viceroy Hotels Limited.
Karuchola Koteswara Rao, the IRP appointed by the National Company Law Tribunal, has informed about the move to invite resolution plan from potential applicants.
The Hyderabad-based hospitality chain has been brought under the Corporate Insolvency Resolution Process by the NCLT, Hyderabad on March 12, 2018.
While providing details of the modalities to submit the resolution plan, the IRP has set May 29 as the last date for receiving the expression of interest for the resolution plan.
Insolvency resolution
The NCLT had initiated a corporate insolvency resolution process against Viceroy Hotels and appointed KK Rao as interim resolution professional.
The matter relates to a petition initiated by Asset Reconstruction Company (India) Limited (ARCIL) against Prabhakar Reddy, promoter of Viceroy Hotels. The hotel company had borrowed Rs 321 crore from lenders, which included SBI, Axis Bank, IDFC, Canara Bank among others during 2007-2011.
The loan book was acquired by ARCIL. After its efforts to recover the dues from Viceroy Hotels failed, ARCIL approached NCLT under the Insolvency and Bankruptcy Code-2016. It claimed Rs 525 crore, which includes interest component.
While the Viceroy management contended that it was solvent and needed some more time to honour its financial commitments, and that ARCIL has been showing much bigger amount than what was due.
It contended that part of the dues of Viceroy Hotels were directly been paid by the Marriott Group, which manages couple of its properties.
Financial trouble
The hospitality chain got into financial trouble having taken up two major hospitality projects in Begaluru and Chennai, both of which it had to divest through slump sale.
Under its fold, it currently has two hotel properties managed by Marriott and its subsidiary manages Minerva Hotels, Bluefox and Minerva Coffee shop chain of restaurants.
The NCLT, while earlier admitting the case under the insolvency proceedings, directed the professional to convene a meeting of Committee of Creditors to explore if a resolution plan could be worked out. It had also provided for a moratorium that halts all proceedings against Viceroy Hotels.
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