The National Company Law Tribunal has approved the resolution plan of Darwin Platform Infrastructure to revive the debt-ridden project.
MUMBAI (India CSR): Lavasa, India’s first private hill station, located near Pune in Maharashtra, has been sold to Darwin Platform Infrastructure for Rs 1.8k crore. The National Company Law Tribunal (NCLT) has approved the resolution plan of Darwin, which includes a payout of Rs 1,814 crore over eight years to lenders, homebuyers and operational creditors.
Lavasa: A dream project turned sour
Lavasa was developed by Hindustan Construction Company (HCC), which had envisaged a European-style city spread over 25,000 acres in the Mulshi Valley in the Western Ghats. Lavasa Corporation had received permission to construct dams on the Warsgaon River and build the required infrastructure for a city. The project was launched in 2000 and was expected to be completed by 2021.
However, Lavasa faced several challenges, such as environmental clearance issues, land acquisition disputes, financial crunch and legal cases. The project was stalled in 2010 after the Ministry of Environment and Forests (MoEF) issued a show-cause notice to Lavasa for violating environmental norms. The MoEF later granted conditional clearance to Lavasa in 2011 but imposed a penalty of Rs 200 crore for the damage caused to the environment.
The project also faced opposition from local villagers, activists and politicians, who alleged that Lavasa had acquired land illegally, displaced tribals, violated forest rights and water laws, and caused ecological damage to the region.
The financial troubles of Lavasa worsened after the demonetisation of 2016 and the implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA). The company defaulted on its loan repayments and was dragged to the NCLT by one of its creditors, Raj Infrastructure Development India, in 2018. The NCLT admitted the bankruptcy petition against Lavasa in August 2018.
Darwin: A new hope for Lavasa
Darwin Platform Infrastructure is a Mumbai-based conglomerate with interests in retail, realty, infrastructure and other businesses. The group is headed by Ajay Harinath Singh, a first-generation entrepreneur. Darwin had earlier shown interest in bidding for Jet Airways and Reliance Capital.
Darwin’s resolution plan for Lavasa was approved by the NCLT after the lenders voted in favour of it. The plan envisages a payout of Rs 1,814 crore over eight years; it includes Rs 929 crore to lenders, Rs 438 crore on delivering fully constructed houses to homebuyers and Rs 447 crore to operational creditors.
There are 837 homebuyers whose claims have been admitted. Their admitted claims total Rs 409 crore. The total claim amount admitted by the company, including from lenders and operational creditors, is Rs 6,642 crore.
The resolution plan also envisages the delivery of fully constructed properties to homebuyers within a period of five years of receiving environmental clearance on an actual cost basis. Homebuyers will have to pay actual future construction costs to Darwin towards obtaining constructed properties in the project. To ensure transparency in the construction costs, Darwin proposes to constitute a ‘construction cost determination committee’ of four members consisting of equal representation of homebuyers’ representatives and Darwin’s management team.
The top financial creditors of Lavasa are Union Bank of India, L&T Finance, Arcil, Bank of India and Axis Bank.
