hyatt regency: Bank of Maharashtra fails to attract buyers for loans to Asian Hotels (North)

Bank of Maharashtra failed to receive any firm bids for its loans of Asian Hotels (North), at the auction held on Tuesday, said people aware of the development. Asian Hotels (North) which operates the five-star property Hyatt Regency (Delhi).

The bank had set a reserve price of Rs 330 crore as against the outstanding dues of Rs 324 crore, according to the auction notice posted on the bank’s website.

The bank had received expressions of interest from a few asset reconstruction companies, but eventually, none gave a firm bid at the auction on September 26, the people cited above said.

The company suffered a setback due to Covid-19, resulting in a cash crunch. In December 2020, it entered a one-time restructuring in line with the guidelines proposed by the Reserve Bank of India.

ET has sought comments from the Bank of Maharashtra, which will be updated later today.

Lenders of Asian Hotels (North) agreed to a restructuring proposal involving a moratorium on payments between September 1, 2020 and March 30, 2022, according to the company’s FY23 annual report. The company claims that some banks declared the account a non-performing loan during the moratorium. The company challenged this move in the High Court, the report said. The court stayed the lenders’ move to declare the account as NPA and directed lenders not to take any recovery action against the company.Since the court has barred banks from taking any legal action to recover their dues, lenders are looking at alternative ways to recover their loans. This may have prompted the Bank of Maharashtra to seek buyers for its debt, people cited above said.