NCLT approves Rs 301 crore resolution plan for Kolkata-based Sarga Hotel

The NCLT has approved Rs 301-crore resolution plan submitted by Shri Ram Multicom Private Limited for Sarga Hotel. Kolkata-based Sarga Hotel operates Five-Star hotel — The Westin Kolkata Rajarhat at New Town, Kolkata. The company owed Rs 950 crore to its creditors.

The resolution plan provides for Rs 300.33 crore to secured financial creditors against their admitted claims of Rs 764 crore. Operational creditors receive Rs 41 lakh against their admitted claims of Rs 29 crore, while unsecured financial creditors receive Rs 23 lakh against their admitted claims of Rs 23.27 crore.

The resolution plan was earlier approved with 100% voting share by the Committee of Creditors (CoC). As per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor.

Insolvency proceedings against the corporate debtor was initiated by Yes Bank after the former failed to make a repayment of Rs 333 crore. The corporate insolvency resolution process got initiated in February 2022. The NCLT had Avishek Gupta as the resolution professional in the case.

According to Yes Bank, Sarga Hotel had sought financial assistance from it in or around February, March, 2016 after which the bank issued facility letter on 16th March 2016. On 28 March 2016, 26 April, 2016, 26th May 2017 and on 8 April 2019, addendum facility Letters were issued by the the bank.  It is submitted that on 13 December 2016 Facility Agreement along with Demand Promissory Note, letter of continuity, hypothecation agreement and deed of guarantee were executed.

However, the account was declared NPA on 29 February 2020.

Incorporated in 2004, Sarga Hotel Private Limited (SHPL) operated five-star hotel The Westin Kolkata Rajarhat at New Town, Kolkata. With 304 rooms and 16 suites, it’s the biggest Westin in Eastern India. Sarga Hotel had entered into agreement with Starwood Asia Pacific Hotels and Resorts PTE. LTD. and Westin Hotel Management LP in 2007 for management and operations of the property. The Resolution Applicant reserves its right to re-negotiate with the Licensee — Westin Hotel Management, L.P.

The Resolution applicant — Shri Ram Multicom Pvt Ltd is engaged in real estate development, TMT steel trading (manufactured by Electrosteel Steels Ltd and Jindal Steel and Power Ltd) , Jewellery (Tanishq), and logistics business (acts as carrying and forwarding agent for Indian Oil Corporation Ltd and ACC Ltd). It has two operational malls and a hotel in Dhanbad.

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