Bengaluru-based Prestige Estates Projects has made an upfront payment of Rs 370 crore ($50 million) to the lenders of Mumbai’s stressed Ariisto Developers Pvt Ltd under the insolvency process.
Moreover, it has infused an amount of Rs 2 lakh to acquire 100% of the firm.
This comes after the National Company Law Tribunal (NCLT) in March gave a go-ahead to the resolution plan worth Rs 1,650 crore approved by the lenders led by Vistra ITCL (India) Ltd in November 2019.
Under the approved plan, Prestige “will pay Rs 370 crore to the lenders of Ariisto’s Mumbai project in Mulund and will develop 800,000 square feet (sq ft) of commercial space as part of the project which is a mix of residential and commercial and has a potential saleable area of approximately 7.5 million sq ft”.
Rest of the payment will be made in the fourth year from the acquisition date.
Other resolution applicants included L&T Realty, Runwal Developers, Kanakia Spaces Realty, Kalpataru, and Keystone Realtors (Rustomjee Group).
Under the resolution plan, financial creditors will receive Rs 1605.9 crore, operational creditors Rs 22.6 crore, while employees will get 100% of their claims at Rs 79 lakh.
The total debt claims stand at Rs 2,457 crore (around $330 million) translating into a haircut of 33% to the lenders.
The average liquidation value of Ariisto is Rs 755 crore ($102 million) while the fair value is almost Rs 1,090 crore ($147 million).
Financial creditors include HDFC, IIFL, Ajay Piramal-owned entity Aasan Corporate Solutions, Blacksoil Capital, JM Financial Capital, wealthy individuals and homebuyers.
About 350-400 homebuyers stand to benefit from the approval of the plan for the project that was stuck for more than a decade due to litigation.
Incorporated on 10 November 2016 and an erstwhile partnership firm formed in April 2005, Ariisto is engaged in construction of residential buildings and other allied infrastructure activities. Its projects at Mulund in Mumbai are Ariisto Celestia and Ariisto Siesta which are yet to be completed.
Ariisto was dragged into bankruptcy in November, 2018 on a plea by its financial creditor Dipco Pvt Ltd over a loan default of Rs 16.5 crore.