Construction firm HCC's real estate firm Lavasa Corporation will face insolvency proceedings with the NCLT on Thursday admitting plea of lenders of the debt-ridden realty firm.
Lavasa Corporation is developing a hill city known as 'Lavasa' near Pune in Maharashtra.
In a filing to the BSE, the HCC on Thursday said that the National Company Law Tribunal (NCLT) has admitted a plea filed by operational creditors who initiated Corporate lnsolvency Resolution Process (CIRP) against Lavasa Corporation under the lnsolvency and Bankruptcy Code.
NCLT appointed Devendra Prasad as Interim Resolution Professional (IRP).
Lavasa Corporation Ltd is promoted by Hindustan Construction Company with 68.7 per cent stake. Avantha Group has 17.18 per cent stake, while Venkateshwara Hatcheries has 7.81 per cent stake and Vithal Maniar 6.29 per cent stake.
"Lavasa is a very special urban development project and an initiative well ahead of its time. While shareholders' interests have been sacrificed, we are hopeful that the pioneering efforts to grow Lavasa into a thriving smart city will now find stewardship in the hands of a new owner, enabled by NCLT," HCC Director and group CEO Arjun Dhawan said.
A swift resolution through IBC would benefit all stakeholders, especially customers, who have patiently supported Lavasa through this tumultuous period, he added.
Lavasa was initiated according to policy and regulations of the Maharashtra government for new hill stations, as India's first privately built smart city.
Lavasa has made substantial progress in building substantial infrastructure, over 2,200 apartments and villas, hotels and numerous city amenities and services, including an international convention centre.
HCC said the project was severely impacted by a Ministry of Environment notification to stop work for jurisdictional reasons and not for environmental infractions.
"The consequent delay of 1.5 years in obtaining clearances affected the project and brand Lavasa in many ways. Operations slowly came to a stand-still due to paucity of working capital and caused Lavasa's investors and partners to also step back or defer their investment plans," HCC said.
A resolution plan was submitted to revive Lavasa project, but it was not accepted by the lenders, the company said.
"Now, under the ClRP process, the Resolution Professional and Committee of Creditors will take charge of Lavasa management and shall work towards implementation of a Resolution Plan within 270 days", the filing said.