Imagicaaworld Entertainment creditors may involve ARC to sell firm

23 Nov 2021 CW Team

As part of the rejig, creditors have resolved to order a rebid, possibly including an asset reconstruction company (ARC), which will buy the debt from banks and find a buyer for the firm. Bankers say that involving an ARC and selling the loan portfolio will be simpler and faster as it will not require regulatory and court approvals.

Creditors have chosen that obtaining an ARC in the middle will be faster as banks will not have to ask for regulatory permissions or launch an open offer. It additionally decreases chances of any litigation by Shetty in the future.

Imagicaa owes lenders a minimum of Rs 1,020 crore and has so far obtained a single binding tender from Malpani Group, which has submitted a Rs 5-crore bank guarantee in line with the terms mentioned in the bidding document. The group has bid more than Rs 500 crore that involves an equity stake for lenders in Imagicaa that can be encashed later.

Lenders are not agreeable to taking the equity stake. Thus, the best way is for the debt to be transferred to an ARC, which will then work out the modalities with Malpani or if another bidder comes along. Banks will be able to recover on a cash basis this way in a shorter period. Lenders are expected to advertise for tenders for a portfolio sale coming month. A couple of ARCs have already displayed interest in joining the process.

They plan to have at least two rounds of bidding to guarantee that they have effective price discovery. They plan to close this deal in the fourth quarter.

Imagicaa holds many theme parks around Mumbai and Pune and is supported by Shetty, who possesses 31% directly and indirectly. Shetty is a well-known Bollywood producer. Imagicaa has been meeting financial pressures because of increasing costs in the past couple of years. These pressures have been increased due to the Covid-19 pandemic, which closed theme parks across the world.

Image Source

Backed by well-known Bollywood producer Manmohan Shetty, creditors to Imagicaaworld Entertainment are rejigging the sale process of the debt-laden firm to decrease regulatory approvals and possible legal difficulties. As part of the rejig, creditors have resolved to order a rebid, possibly including an asset reconstruction company (ARC), which will buy the debt from banks and find a buyer for the firm. Bankers say that involving an ARC and selling the loan portfolio will be simpler and faster as it will not require regulatory and court approvals. Creditors have chosen that obtaining an ARC in the middle will be faster as banks will not have to ask for regulatory permissions or launch an open offer. It additionally decreases chances of any litigation by Shetty in the future. Imagicaa owes lenders a minimum of Rs 1,020 crore and has so far obtained a single binding tender from Malpani Group, which has submitted a Rs 5-crore bank guarantee in line with the terms mentioned in the bidding document. The group has bid more than Rs 500 crore that involves an equity stake for lenders in Imagicaa that can be encashed later. Lenders are not agreeable to taking the equity stake. Thus, the best way is for the debt to be transferred to an ARC, which will then work out the modalities with Malpani or if another bidder comes along. Banks will be able to recover on a cash basis this way in a shorter period. Lenders are expected to advertise for tenders for a portfolio sale coming month. A couple of ARCs have already displayed interest in joining the process. They plan to have at least two rounds of bidding to guarantee that they have effective price discovery. They plan to close this deal in the fourth quarter. Imagicaa holds many theme parks around Mumbai and Pune and is supported by Shetty, who possesses 31% directly and indirectly. Shetty is a well-known Bollywood producer. Imagicaa has been meeting financial pressures because of increasing costs in the past couple of years. These pressures have been increased due to the Covid-19 pandemic, which closed theme parks across the world. Image Source

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