The National Company Law Tribunal (NCLT) has sanctioned the acquisition of two assets belonging to the insolvent real estate developer Housing Development and Infrastructure (HDIL) by Adani Properties, facilitated through the corporate insolvency resolution process (CIRP).
The assets consist of a commercial property named ‘Inspire BKC’ located in the Bandra-Kurla Complex, a prominent business district in Mumbai, as well as a land parcel situated in Kalyan Shahad, on the outskirts of Mumbai. Adani Properties emerged as the sole bidder to submit a proposal compliant with the Insolvency and Bankruptcy Code (IBC) for both properties.
The resolution plan for the Inspire BKC commercial project is appraised at Rs 3 crore, which encompasses Rs 2.85 crore designated for creditors and Rs 15 lakh allocated for CIRP expenses. For the Shahad land parcel, the fair value and liquidation value have been assessed at Rs 89.66 crore and Rs 62.76 crore, respectively. Industry experts estimate that the combined value of these assets in central Mumbai and Kalyan exceeds Rs 2,000 crore. The Mumbai bench of the NCLT has ratified the resolution plans for both projects in accordance with Section 31 of the IBC, 2016.
The committee of creditors (CoC) approved both plans with a voting share of 66.08% in 2022, with the voting process concluding in November 2022. The HDIL, promoted by Rakesh Wadhawan, has been in insolvency proceedings since 2019, with acknowledged liabilities surpassing Rs 7,789 crore.
Although the resolution professional initially issued a call for expressions of interest for the resolution of the entire company in February 2020, no proposals were received. Given the existence of numerous unfinished residential projects, the National Company Law Appellate Tribunal (NCLAT) permitted a project-wise resolution plan. Initially, the CoC rejected this proposal; however, after receiving objections from homebuyers, the committee changed its position in September 2021 and empowered the RP to pursue project-wise resolution.
HDIL was subsequently segmented into 10 verticals to enhance the resolution process. The current approvals granted to Adani Properties encompass verticals V and IX. For Vertical V, concerning the Inspire BKC commercial project, the proposal indicates that Adani will not take over HDIL as a going concern but will instead demerge the BKC project into itself or a subsidiary.
Furthermore, Adani has committed to uphold the existing Slum Rehabilitation Authority (SRA) development agreement with Budhpur Buildcon. Budhpur Buildcon, acting on behalf of Adani’s interests, currently possesses the Letter of Intent for the slum rehabilitation initiative that HDIL initially commenced in BKC, and is responsible for executing the rehabilitation under the supervision of the SRA. Regarding Vertical IX, the Shahad land parcel, the Punjab and Maharashtra Cooperative Bank – now known as Unity Small Finance Bank – is the exclusive secured creditor with mortgage rights.
The tribunal dismissed the bank’s objections to the valuation in July 2024. Both proposals incorporate performance guarantees of Rs 5 crore each, as mandated by the CIRP regulations.
