Promoter wins back control of Asian Hotels (West) after NCLAT nod to OTS

The National Company Law Appellate Tribunal (NCLAT) has approved the one-time settlement (OTS) proposal under Section 12A of IBC 2016 submitted by the promoters and suspended Directors of Asian Hotels (West) and Shareholders, the company said in a regulatory filing. The Section 12A application was first filed on 11th August 2023 and later revised on 4th October 2023.

With the approval of the OTS, the order dated 16th September, 2022 admitting Section 7 application under IBC is set aside and the corporate insolvency resolution process of Asian Hotels (West) is closed.

The appeal against NCLT order initiating CIRP against Asian Hotels (West) was filed by Aria Hotels and Consultancy Services Private Limited, a subsidiary of the corporate debtor, wherein the corporate Debtor holds 99.98% equity shares, and Sandeep Gupta, the promoter of the corporate debtor.

The amount deposited by the appellants in pursuance of the NCLAT order dated 17th October 2023 in which lien is marked to the Registrar, NCLAT is directed to be remitted to the Resolution Professional (RP’) for distribution of 100% dues of all Creditors.

The Bank Guarantee of Rs 40 Crore, already deposited, may be invoked by resolution professional Sapan Mohan Garg.

The Registrar of NCLAT should intimate the lenders in reference to the Fixed Deposit Receipt (FDR) in which the lien is marked to the Registrar, NCLAT to discharge the lien and remit the amount to the RP in the bank account as to be communicated by the RP to the lenders in which remittance should be made in one week from the date of the order — 9th January, 2024. The RP will distribute the amount so deposited within further period of three weeks.

The insolvency proceeding against Asian Hotels (West) was initiated in September 2022 by JM Financial Asset Reconstruction Company for the company’s failure to pay an amount of Rs 264 crore. The original lender, Yes Bank, had assigned the debt to the asset reconstruction company.

Asian Hotels (West) owes Rs 295 crore to financial creditors. JM Financial Asset Reconstruction Company has sold the loan to UV Asset Reconstruction Company, which now has the highest voting share (98.84%) in the CoC. The company is owned 70% by Sandeep Gupta and family. The Corporate Debtor is the owner of a hotel under the brand name ‘Hyatt’ located in Mumbai and the same has been shut since June 2021. Aria Hotels and Consultancy Services Private Limited owns a luxury 5- star hotel in Aerocity, New Delhi under the brand name JW Marriott.

Also See: Six bidders in race to acquire Asian Hotels (West)