Malpani Group submits over Rs 500-cr bid to acquire Imagicaa

Creditors to Imagicaaworld Entertainment, promoted by noted Bollywood producer Manmohan Shetty, have received a single binding bid from Ahmednagar-based Malpani Group to take over the company that owes lenders a minimum of ₹1,020 crore.

The Malpani Group, with interests ranging from theme parks to green energy to FMCG and real estate in Maharashtra, has submitted a ₹5-crore bank guarantee in line with the requirements specified in the bidding document, indicating the group's seriousness.

The group has bid more than ₹500 crore that includes equity stake for lenders in Imagicaa that can be encashed later, a person aware of the transaction said.

"Malpani is very serious about the bid because it believes this acquisition will fit perfectly with its existing businesses that include theme parks. It expects to capture the synergies from this acquisition," the person said.

Union Bank is the largest creditor to the company with a principal loan of ₹323 crore, followed by Bank of Baroda (BoB) at ₹237 crore.

BoB Capital Markets, the investment banking arm of BoB, is handling the process of finding a buyer for the company. The process is being carried out by lenders outside the bankruptcy courts.

Imagicaa owns multiple theme parks around Mumbai and Pune and is promoted by Shetty, who owns 31% directly and indirectly.

Shetty is a noted Bollywood producer having financed films like Chakra, Ardh Satya and Hazaar Chaurasi Ki Maa. He sold his film business to Anil Ambani's Reliance MediaWorks in 2005 and branched out to a new business of building theme parks.

Imagicaa shares ended at ₹11.64 a piece on the BSE on Thursday, up 5% on the back of a 1% rise in the benchmark Sensex.

Although Malpani was the only binding bidder, a couple of asset reconstruction companies had also expressed interest but did not give a binding offer. As a result, creditors are likely to move ahead and evaluate Malpani's bid and put it up in competition to check for bidders in a Swiss Challenge likely to be opened later this month.

Lenders expect to complete the process and receive the money by the end of December.

Swiss Challenge is a method of bidding in which the first bid is put up to be bettered. In case a better bid is made, the first bidder gets the opportunity to match or better the bid and take the distressed company. Bankers have been using Swiss Challenge to get the best value for a distressed asset due to the relatively short time frame.

"Malpani has put money on the table and their bid is also a strategic one because they have existing businesses which will be fit with Imagicaa. As lenders we would also want the business to be sustainable to get the maximum value, so one can say they are favourites," said a second person involved in the process.

Imagicaa has been facing financial pressures due to rising costs in the last couple of years. These pressures have been compounded due to the Covid pandemic which shut down theme parks across the world.