Infrastructure major Hindustan Construction Company (HCC) said on Thursday that its wholly-owned subsidiary Lavasa Corp Ltd (LCL) is headed to the National Company Law Tribunal (NCLT).
DNA Money had first reported the possibilities of Lavasa, which has been developing a private hill city project near Pune for over a decade now under the same name, heading for bankruptcy on March 22 this year.
The hill city project has been marred due to environmental, political and financial issues as a result of which it is has faced significant delays.
In a BSE notification late Thursday evening, HCC said that corporate insolvency process has been initiated against Lavasa Corp. "The NCLT vide its order dated30/08/2018 has admitted a plea filed by operational creditors who initiated corporate insolvency resolution process (CIRP) against Lavasa Corporation Ltd under the Insolvency and Bankruptcy Code (IBC). NCLT has appointed Devendra Prasad as interim resolution professional under the provisions of IBC," HCC said in the notification.
Lavasa Corp is jointly held by HCC (68.7%), Avantha Group (17.18%), Venkateshwara Hatcheries (7.81%) and Vithal Maniar (6.29%).
Arjun Dhawan, director and group chief executive officer, HCC, said Lavasa is a very special urban development project and an initiative well ahead of its time. "While shareholders interest have been sacrificed, we are hopeful that the pioneering efforts to grow Lavasa into a thriving city will now find stewardship in the hands of a new owner, enabled by NCLT. A swift resolution through IBC will benefit all stakeholders, especially customers who have patiently supported Lavasa through its tumultuous period."
Under the CIRP process, the resolution professional and the committee of creditors will take charge of Lavasa management and work towards implementation of a resolution plan within 270 days.
