Indian Hotels, Chalet among cos keen to acquire debt of Rajesh Lifespaces' arm

Mumbai: The Tata Group's Indian Hotels, K Raheja Corp Group's Chalet Hotels and the local asset owner of the Hyatt chain are among 26 entities that have expressed interest in taking over the debt of the defunct hotel business of real estate company Rajesh Lifespaces, documents accessed by ET showed.

Among the others interested in the company, with a hotel property in Mumbai's Powai, are large alternative asset funds such as Oaktree, Kotak Investment Advisors and asset reconstruction companies.

Rajesh Business & Leisure Hotels owes lenders, led by ICICI Bank, a total of ₹621 crore. It had tied up with Singapore-based GHM Hotel 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. Rajesh Business has been marked as a non-performing asset (NPA) on bank books since 2019.

"They are a reputed name in the residential projects but for some reason, they tried this experiment in commercial real estate which failed because they did not have the experience in this business. Banks have now initiated recovery proceedings through the National Company Law Tribunal (NCLT)," said a person familiar with the account.

ICICI Bank has the largest exposure to the company with ₹331 crore of loans, followed by Bank of Baroda (BoB) with ₹162 crore and Union Bank of India with ₹128 crore, documents with ET showed.

The claims from banks are in the form of external commercial borrowings and bank guarantees.

Companies have until November 25 to submit expressions of interest. Bankers expect to complete the bidding process by mid-January 2023. The list includes Rare ARC, Acre Arc, Edelweiss Alternative Asset, Prudent ARC among others. However, these companies may not be able to bid as recent RBI norms do not allow ARCs with a net worth of less than 1,000 crore to bid for assets through the NCLT. However, they could partner with companies.

IHCL, Chalet and Saraf Hotels, which operates its properties under the Hyatt management, are considered strong contenders to submit a bid. A Chalet Hotels spokeswoman declined to comment while an email sent to IHCL and Saraf spokespeople did not elicit a response. Saraf has submitted EoIs under two arms - Unison Hotels and Juniper Hotels.

“There is demand for this property because it is close to the commercial area of Powai and there is no five-star hotel anywhere in the vicinity. Besides, though the building has to undergo final renovations the main investments like a kitchen and bar are ready which makes it a good buy for any hotel group,” said a second person familiar with the property.