CHENNAI: The much-hyped bid by MGM Healthcare to take over Appu Hotels Limited has stumbled upon a hurdle as the National Company Law Appellate Tribunal (NCLAT) has stayed the order of its implementation. The tribunal comprising Justice M Venugopal and Member (Technical) VP Singh granted the parties two weeks time to file replies and stayed the National Company Law Tribunal (NCLT) order till the next date of hearing, posted for August 25.
The order was passed after Palani Gounder, promoter and erstwhile director of Appu Hotels, moved the NCLAT alleging that the adjudicating authority, NCLT, had failed to interfere with the attempt to acquire the assets for fewer than 25 per cent of its actual value, while the ‘promoters’ are ready and willing to infuse more funds than the proposed Rs 423-crore bid by MGM Healthcare’s MD, MK Rajagopalan, and to settle all the creditors expeditiously.
In the petition, Gounder said the total value of assets comes to Rs 1,641 crore, which is four times the value proposed in the ‘resolution plan’. In fact, the group’s Chennai property alone would be worth Rs 350 crore, which meant the shareholders are left high and dry, he said.
It was argued that as per Regulation 35 (2) of the Insolvency and Bankruptcy Board of India Regulations, 2016, the fair and liquidation values had to be provided to the Committee of Creditors (CoC) upon receipt of resolution plans, and this was not done as admitted by the resolution professional, Radhakrishnan Dharmarajan, in the fifth CoC meeting.
The respondents, however, argued that the NCLT approval was valid, and therefore the tribunal may not pass any interim order. After recording all submissions, the NCLAT said a detailed rumination is required and granted the respondents two weeks’ time to file detailed replies. Appu Hotels owns and operates Le Meridien in Chennai and Coimbatore.