Lenders fix base auction price of Rs 305 crore for Rajesh LifeSpaces’ hotel business, ET RealEstate

June 24, 2023

Lenders to the defunct hotel business of real estate company Rajesh LifeSpaces have set a base price of ₹305 crore for a final auction of the hotel property at Powai in Mumbai, as they seek to recover outstanding loans of ₹621 crore to the firm.

Bidders will have to increase their bids by ₹10 crore in each round with the lowest bids getting eliminated, people familiar with the process said.

“The auction will start on January 24 with all bidders expected to progressively match or beat the highest bidder. If a bidder does not bid, his last bid will be taken as a final bid,” said a person. Banks have time till early March to submit final resolution plans to the National Company Law Tribunal. The committee of creditors has given a go-ahead to extend the resolution timeline.

Bankers expect aggressive bids for the property because it is a rare hotel that is up for sale with all approvals, like land, building and government licences for restaurant and liquor, in place. Also, the transfer to the eventual purchaser will be clean because it is via a court-monitored process.

Earlier this month, ET reported that banks had received six initial proposals for Rajesh Business & Leisure Hotels, including from DMart promoter Radhakishan Damani’s investment vehicle, Bright Star Investments.

The other bidders were Ahmedabad-based hospitality and restaurant group Sankalp Recreation, Mumbai-based Rockwood Hotels & Resorts, Kolkata-based Shri Ram Multicom, Delhi-based Unison Hotels and Ahmedabad-based Rare Asset Reconstruction Co. Rajesh Business & Leisure Hotels had tied up with Singapore-based GHM Hotels to operate a 316-room five-star hotel under the ‘The Chedi’ brand at Kanjurmarg near Powai. However, the company could not complete the project due to a liquidity crunch.

It has been marked as a non-performing asset on the books of banks since 2019.

  • Published On Jan 20, 2023 at 09:13 AM IST

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