NCLT asks Brookfield to renew performance guarantee for IL&FS HQ

The National Company Law Tribunal’s (NCLT) Mumbai bench has asked global institutional investor Brookfield Asset Management to renew the performance guarantee it had submitted while bidding for infrastructure lender IL&FS’ headquarters in Mumbai’s Bandra-Kurla Complex.

The bankruptcy court directed Brookfield’s subsidiary to renew the guarantee within 30 days of the order delivered on Friday to avoid the possibility of disqualification of its successful bid for the property.

In March 2022, Brookfield had emerged as the highest bidder for the property with its Rs 1,080- crore bid. It had submitted a performance guarantee worth 10% of this amount but has not renewed the same since April.


The directive is part of the NCLT’s order disposing of the long-pending application linked to the sale of IL&FS’ marquee headquarters.

IL&FS has revalued the property at Rs 1,722 crore and has requested Brookfield to revise the offer to Rs 1,481 crore to consummate the deal.

NCLT has ruled that the agreement between IL&FS and the Brookfield subsidiary is a concluded contract. It has also ruled that IL&FS has the right to amend the terms of the Letter of Intent (LoI) and the same will be binding on applicants.

"Contrary to the argument by ILFS, NCLT has found that the LoI is a concluded contract between the parties,” Brookfield said in response to ET's query. “For the dispute over IL&FS unilaterally changing purchase consideration, we intend to pursue remedies including appellate avenues in accordance with law.”

People familiar with the development said Brookfield has already appealed the matter to the National Company Law Appellate Tribunal (NCLAT).

The dispute stems from allegations by Brookfield that IL&FS had attempted to unilaterally alter the purchase consideration after the LoI was issued. IL&FS, on the other hand, has argued that the transaction was still subject to several conditions and that subsequent developments, including recalibrated valuations.

The property, located in Mumbai’s prime business district, is among the most valuable assets under the IL&FS resolution process.