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rajesh lifespaces: Rare-Naman leads race for Rajesh Lifespaces’ hotel arm

Lenders to real estate developer Rajesh Lifespaces’ hospitality arm are likely to name the consortium of Rare Asset Reconstruction Co and Naman Group as the preferred bidder for the takeover of the company’s defunct hotel business in Mumbai.

The consortium’s offer of ₹461 crore upfront with another ₹31 crore in equity in the company is likely to be declared as the top bid by bankers next week, following which it will be put to vote, people aware of the development told ET.

“Rare has tied up with Check-Inn, which is a part of the Mumbai-based Naman Group and has a stake in Sofitel (Sofitel Hotels India) and some other hotels in Mumbai and Thane,” said one of the people cited earlier. “They are the only ones who have shown ₹480 crore in cash in their bank account earmarked for this acquisition, which is a big reason why they are the favourite.”

ICICI Bank has the largest exposure to the company at ₹331 crore, followed by Bank of Baroda (₹162 crore) and Union Bank of India (₹128 crore). Their exposure is in the form of external commercial borrowings and bank guarantees. Lead lender ICICI Bank did not respond to ET’s request for comment.

After 13 rounds of bidding, the banks last week shortlisted three bidders – Ahmedabad-based hospitality and restaurant group Sankalp Recreation, Kolkata’s Shri Ram Multicom, and Rare ARC.

Sankalp’s offer was the highest at ₹533 crore, but a majority of the payment is deferred – it’ll be paid 300 days after the National Company Law Tribunal (NCLT) gives its approval. Also, Sanklap has so far not been able to detail its source of funds, which has made banks wary.

Shri Ram Multicom’s ₹474 crore offer is also payable after 90 days.”The Rare-Check-Inn consortium also has tangible cash flows, is better rated and, more importantly, has also proposed to bear any additional costs after the resolution, which is why it has an edge,” the person cited earlier said.

The defunct hotel in Mumbai’s Powai locality owes about ₹6 crore to the municipal corporation and also will need further investments to complete the building, for which the Rare-Naman group consortium has committed an additional ₹250 crore.

The committee of creditors has hired Resurgent Resolution Professionals to compare all three plans based on a performance matrix and net present value (NPV). The report will be given to the lenders and a vote will be called, most likely next week.

Rare ARC had initially bid for the hotel on its own but later tied up with Check-Inn, which also helped increase its net worth to more than ₹1,000 crore, which is the minimum required for ARCs bidding for assets under the bankruptcy process, as per Reserve Bank of India norms.

In November last year, the lenders had received some 26 expressions of interest from entities to take over the debt-laden hotel.

Interest in the hotel has been strong because Mumbai’s Powai locality doesn’t have any five-star or mid-market hotels. Also, the rebound in leisure and business travel after the Covid outbreak has whetted the appetite of potential buyers. Lenders had called for an online challenger bid auction this month after several bidders showed interest in the asset.

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