Cases filed in 3 high courts
ITC Hotels, India's second largest hotel chain, has emerged as the highest bidder for Goa-based Park Hyatt property, which was put on the block by IFCI. But the original owners allege the property is being sold at a throwaway price.
P L Suri-headed Blue Coast Hotels, the owner of the Goa property, said the hotel which was kept as a collateral against loan taken from IFCI has been put on the block by the state-owned finance company despite no mutual consent.
A source from Blue Coast Hotels stated, "We have filed cases challenging the sale in Goa, Bombay and Delhi high courts. The property which is valued at Rs 1,250 crore (Rs 12.5 billion) is being sold at just Rs 550 crore (Rs 5.5 billlion)".
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Blue Coast used the loan amount from IFCI to build a 450 room MGM Grand luxury hotel in New Delhi, the construction of which has already begun and expected to be completed by April 2018. IFCI, in October, decided to sell the Blue Coast's Goa property under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SRFA & ESI).
Blue Coast is also alleging that the loan amount was recalled prematurely by IFCI and was against the loan agreement signed between the two parties. Blue Coast has also alleged that IFCI did not submit a copy of the valuation report of the Goa property.
While the reserve price of the property stood at Rs 542 crore (Rs 5.42 billion) as per IFCI's tender document, ITC's successful bid price was Rs 515 crore (Rs 5.15 billlion). Though ITC officially has refused to comment further on the deal, it has made a payment of Rs 129 crore (Rs 1.29 billlion) towards it. IFCI has advised ITC to remit the balance amount within 15 days for the confirmation of sale.
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"IFCI Ltd. have informed us that the Company has been declared as the highest successful bidder for Park Hyatt Hotel located at Cansaulim, Goa along with land and built up area of the hotel together with all buildings and structures and plant & machineries. The aforesaid assets of M/s. Blue Coast Hotels Ltd. were put up on sale today by IFCI Ltd. through public auction under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002", ITC said in a disclosure.
The Hyatt property, which is just 15 minutes drive from the Dabolim airport, is a beach property spread over an area of 45 acres. Opened in 2004 the luxury hotel which has 250 rooms was the winner of Conde Nast Traveller India Readers' Travel Awards (2014) - Favourite Leisure Hotel in India.
IFCI stated in October that it plans to cut non-performing assets by two percentage points before the end of this financial year. Blue Coast is one of the top ten NPA accounts of IFCI which is collectively worth Rs 1,450 crore (Rs 14.5 billion) of credit exposure.
Photograph, courtesy: Park Hyatt, Goa
