After almost two months of heightened apprehension for Lavasa Corporation's many stakeholders, the recent nod by the Ministry of Environment and Forests to consider the company's Hill City project has brought a sigh of relief. Besides the listed parent entity's 65 per cent stake in the company, the Avantha Group and Venkateshwara Hatcheries are other key shareholders in this project, which has already seen Rs 4,000 crore of investment.

Deep discount convertible debentures held by banks such as ICICI Bank and Axis Bank totalling to over Rs 1,000 crore besides unsecured borrowings from the likes of L&T Infrastructure Finance are the major liabilities of Lavasa Corporation. The order for stoppage of work from November 25, 2010, thus put the capital employed by shareholders and lenders at stake and the question of whether the construction was authorised or not cropped up.

Besides investors and lenders, big corporate houses such as Apollo Hospitals, Educomp Solutions which are setting up healthcare facilities and school respectively in the Hill City also underwent anxious moments given their stakes in the projects. Lavasa Corporation has already been selling residential units as well as letting out space on lease for leisure and entertainment. For FY-10 Lavasa managed Rs 481 crore of revenues and Rs 140 crore net profits. The company, in November 2010, received clearance from SEBI to raise Rs 2,000 crore through an initial public offer.

Related Topics
comment COMMENT NOW