NCLT approves Rs 730 cr resolution plan for Rajesh Business & Leisure Hotels

The National Company Law Tribunal (NCLT) has approved resolution plan of a consortium of Rare Asset Reconstruction Company (Rare ARC) and Check-Inn Hotels, a subsidiary of realty developer Shree Naman Group to acquire Rajesh Business & Leisure Hotels.

The company has admitted liabilities of over Rs 1,345 crore, whereas the consortium has proposed a revival plan of Rs 730 crore. Before the tribunal’s approval, the plan had received unanimous backing from the committee of creditors (CoC).

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In April 2022, the company was admitted under the Corporate Insolvency Resolution Process (CIRP) following a petition by ICICI Bank over a default of about Rs 311 crore.

The approved plan provides for an upfront payment of around Rs 479 crore, with secured financial creditors set to receive Rs 461 crore as full and final settlement of their dues. Operational creditors, including employees and statutory authorities, will receive around Rs 6 crore, while unsecured financial creditors, primarily related parties, will not see any recovery.

The consortium has also committed to infuse nearly Rs 250 crore towards completing the stalled hotel project and meeting working capital needs. Payments to creditors are to be made within 60 days of the approval, backed by a Rs 30 crore performance bank guarantee.

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Rajesh Business and Leisure Hotels was developing a hotel project in Mumbai’s Kanjurmarg area, which remained incomplete for years due to funding constraints and cost overruns. The asset had attracted multiple bidders during the insolvency process, with the Rare ARC-Check-Inn combine emerging as the successful resolution applicant after a competitive process.

The plan had earlier faced legal hurdles, including rejection by the NCLT, before being reinstated by the appellate tribunal and upheld by the Supreme Court.

With the approval now in place, control of the company will shift to the successful bidder. An implementation and monitoring committee will oversee execution, including completion of construction and operationalisation of the project.