NCLT Gives Nod To Adani Properties' Acquisition Of HDIL Assets Worth Over ₹2,000 Crore

NCLT Gives Nod To Adani Properties' Acquisition Of HDIL Assets Worth Over ₹2,000 Crore

Introduction

The National Company Law Tribunal (NCLT) has approved Adani Properties' acquisition of two assets of defunct real estate developer Housing Development and Infrastructure (HDIL) through the corporate insolvency resolution process (CIRP). The assets include a commercial property known as 'Inspire BKC' in Mumbai's business district Bandra-Kurla Complex and a land parcel in Kalyan Shahad.

Factual Background

HDIL, a Rakesh Wadhawan-promoted company, has been undergoing insolvency since 2019 with admitted liabilities of over ₹7,789 crore. The company's resolution professional had initially issued an expression of interest for a resolution of the entire company in February 2020, but did not receive any proposal.

Procedural Background

The insolvency process for HDIL began in 2019, and the company was divided into 10 verticals for streamlining the resolution process. Adani Properties was found to be the only bidder to make an Insolvency and Bankruptcy Code (IBC) compliant proposal for both the properties. The committee of creditors (CoC) had cleared both the plans with a 66.08% voting share in 2022.

Issues Involved

1. Valuation of Assets: The valuation of the assets, including the Inspire BKC commercial project and the Shahad land parcel, was a key issue in the acquisition.

2. IBC Compliance: The proposal had to comply with the Insolvency and Bankruptcy Code (IBC) regulations.

Contentions of the Parties

Adani Properties' Contentions: Adani Properties argued that its proposal was IBC-compliant and met the requirements of the CIRP process.

CoC's Observations: The CoC had cleared both the plans with a 66.08% voting share in 2022, indicating their support for the acquisition.

Reasoning & Analysis

The NCLT's approval of Adani Properties' acquisition of HDIL's assets marks a significant development in the insolvency resolution process. The acquisition is expected to benefit creditors and help resolve the insolvency proceedings. The project's valuation and the acquisition process were closely scrutinized by the NCLT, ensuring that the interests of all stakeholders were protected.

The approval of the resolution plans under Section 31 of the IBC highlights the importance of compliance with regulatory requirements. Adani Properties' proposal was found to be IBC-compliant, and the company's agreement to continue the existing SRA development agreement with Budhpur Buildcon demonstrates its commitment to completing the project.

The acquisition is also expected to have a positive impact on the real estate market, as it will allow Adani Properties to develop the assets and bring them to market. The move is likely to benefit homebuyers and creditors, who will receive a fair value for the assets.

Final Outcome

The NCLT approved the resolution plans for both projects under Section 31 of the IBC, paving the way for Adani Properties to acquire the assets.

Implications

The acquisition is expected to benefit creditors and help resolve the insolvency proceedings. The move is also likely to have a positive impact on the real estate market, as it will allow Adani Properties to develop the assets and bring them to market.