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Lavasa’s lenders invoke strategic debt restructuring

LiveMint logoLiveMint 28-09-2017 PTI

New Delhi: Realty firm Lavasa Corp. on Thursday said its lenders have decided to convert part of their loans into equity as part of debt restructuring along with fresh fund infusion from strategic investors to complete its stuck township project near Pune in Maharashtra.

Lavasa Corp. Ltd, which is developing a hill city Lavasa near Pune, has an outstanding debt of Rs5,100 crore, people in the know said. In a regulatory filing, HCC Group’s realty arm Lavasa informed that “lenders have decided to invoke strategic debt restructuring (SDR)”.

The SDR process will involve lowering of debt burden by converting a part of lenders loans into equity, Lavasa said. This will also involve implementation of the proposed business plan and infusion of fresh capital by a financial or strategic investor to implement the project, it added.

This decision was taken at a joint lenders forum (JLF) meeting on 20 September. “As part of a comprehensive solution, the SDR has been invoked in Lavasa Corporation Ltd and its wholly owned subsidiaries — Warasgaon Assets Maintenance Ltd and Warasgaon Power Supply Ltd,” the filing said.

RBI had brought the SDR scheme in 2015 for resolution of bad loans. The SDR will help protect the value of the assets within the timelines prescribed by RBI in its notification. “The lenders took note of the fact that due to delay in implementation of earlier JLF approved structure, the project remained stalled for 2 years and an additional interest of around Rs1,200 crore was accumulated, and hence release of working capital for the projects need to be resolved on priority,” the filing said.

According to people familiar with the matter, Union Bank is the lead banker in Lavasa Corporation and Axis Bank in the two subsidiaries.

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