Three C Homes (3C) Private Limited, the Delhi NCR based real estate developer once sought after by multiple private equity investors, is headed for liquidation after the bankruptcy tribunal rejected a proposed resolution offer, which was less than 20% of the liquidation value.
The bankruptcy proceedings have been underway at the New Delhi bench of the National Company Law Tribunal (NCLT) since September 2019, on a plea by Arun Kumar Sinha, one of the home buyers for the company’s Lotus City project in Greater Noida, Uttar Pradesh. In 2011, the project was sold to over 512 homebuyers but did not kick start due to land disputes.
In June 2020, four prospective bidders showed interest -- East India Udyog Limited, in a joint venture with Ashiana Housing Limited; Noida-based Ace Infracity Developers Private Limited; N S Software (a partnership between Rajdarbar Infotech Private Limited, Sharada Erectors Private Limited and three individuals); and Bengaluru-based developer RMZ Corp’s former executive Harshavardhan Reddy.
Of the four, only the former two entities -- East India Udyog and Ace Infracity Developers -- were considered eligible by the resolution professional.
At the bidding stage in August last year, Ace Infracity Developers offered Rs 180.34 crore, of which Rs 85 crore were sought to be collected from the allottees, as per the order dated February 8, 2021. The developer said it would infuse around Rs 95 crore over a period of two years.
The overall offer stood at one-fifth of the liquidation value of Rs 480.70 crore.
Meanwhile, the admitted claims of the homebuyers (financial creditors) stood at Rs 118 crore of the claimed Rs 128 crore.
Sinha, the petitioner, along with other homebuyers, disapproved of the plan, stating that it offered 19.77% of the liquidation value. The NCLT bench favoured the argument, stating that the plan “seems to be totally inequitable, unjust and highly objectionable as the resolution applicant is taking away the corporate debtor at a value which is nothing but just a pittance”.
The creditor also raised objections that the resolution plan was non-compliant as it was based on assumptions and did not meet the norms of the amendments made under the Insolvency and Bankruptcy Code (IBC) and there was no provision of payments to be made to dissenting creditors.
Accepting most objections and rejecting the Ace Infracity offer, the insolvency tribunal ordered the liquidation of 3C Homes stating, “In view of the reasons mentioned above, we are unable to persuade ourselves that the resolution plan has any potential to fulfill the dream of the homebuyers, which is just 19.77% of the liquidation value of the corporate debtor.”
According to a Times of India report, Ace Infracity’s CMD has said that the company would move the National Company Law Appellate Tribunal against the order with the backing of 94% vote by the Committee of Creditors.
Part of the Three C Real Estate Group, Three C Homes (3C) was started in 2011 with a mandate to develop residential, multi-storey apartments and commercial projects, including information technology (IT) parks and SEZs, schools, hospitals and exhibition centres. Some of the group’s more well known projects included Lotus City, Green Boulevard, Oxygen Boulevard, Patni Knowledge Center, Wipro Technologies and Wipro Campus.
Three C Homes (3C), led by Vidur Bharadwaj, Surpreet Suri and Nirmal Singh, got into financial trouble after a law and order dispute with farmers, since the launch in 2011, who did not allow it to develop its projects. The firm subsequently failed to repay the money it had raised from homebuyers.
The Three C Real Estate Group has been actively courted by multiple private equity investors. In 2007, Kotak India Real Estate Fund I picked up a 35% state in the group’s Green Boulevard project for Rs 65 crore. Kotak, according to a report in Mint, sold its stake in 2012 via a promoter buyback.
In September 2013, real estate dedicated private equity firm Red Fort Capital invested a Rs 365-crore in a Gurgaon-based township project. Red Fort had previously also invested Rs 1,000 crore in various projects by Lotus Green Developers, founded by Nirmal Singh, one of the co-promoters of Three C Homes (3C).
In October 2014, VCCircle reported that private equity giant Blackstone and RMZ Group were in the fray to acquire an office asset of Three C Company (3C). In December 2014, it sealed a mega deal with Blackstone and sold its IT park Oxygen Boulevard for around Rs 650 crore. RMZ pulled out of the race over valuation mismatch.