The hearing has been adjourned till September 27.
The National Company Law Tribunal (NCLT) on Thursday granted Hotel Leelaventure eight weeks to conclude the proposed sale of the company’s properties to Brookfield Asset Management, on the basis of a Sebi order. The tribunal’s directions were based on a prayer for a brief adjournment by Ashish Pyasi of Dhir & Dhir Associates appearing for Hotel Leelaventure. It was agreed to by counsel of JM Financial ARC. Proceeds from successful completion of the Brookfield deal will allow Hotel Leela to settle its debt with lenders.
The hearing has been adjourned till September 27. Earlier this week, Sebi allowed Hotel Leelaventure to go ahead with the proposed asset sale transaction with Brookfield on the condition that it provides information via “additional disclosures in the postal ballot notice”.
Back in April, Sebi had advised Hotel Leela not to act on the proposed sale of the company’s properties to Brookfield based on complaints from minority shareholders ITC and Life Insurance Corporation of India (LIC). ITC has a 7.92% stake in Hotel Leelaventure, while LIC holds 2.36% through its LIC of India Future Plus Growth Fund.
In an exchange notice dated March 18, Hotel Leela informed that it had entered into a binding agreement with a Brookfield Asset Management (Brookfield)-sponsored private real estate fund to sell by way of slump sale four hotels it owns. These hotels are located in Bengaluru, Chennai, Delhi and Udaipur. The property it owns in Agra was subject to approval of shareholders, lenders and other regulatory and statutory approvals.
A postal ballot notice seeking shareholders’ approval to this sale was also issued, with the voting period ending on April 24. The regulator’s directions came within hours of an ITC petition in the NCLT against Hotel Leela, alleging suppression and mismanagement of minority shareholders.
ITC’s petition objected to the Brookfield transaction, alleging it would leave Hotel Leelaventure a mere shell with only liabilities, while allowing promoters to benefit and leaving minority shareholders holding worthless shares with no underlying business or assets.