Lenders to Mumbai-based Rajesh Lifespaces have started the process of recovering their dues from the corporate and personal guarantees issued by the promoters even as they await the go-ahead from the National Company Law Tribunal (NCLT) for the sale of the company’s hotel business.
Rajesh Hospitality, Rajesh Lifespaces, and Rajesh Investments along with promoters Rajesh Patel, Harish Patel and Priyal Patel had provided guarantees for loans to the company’s insolvent hospitality business. Banks led by ICICI Bank are now invoking these guarantees and assets linked to these companies to improve recovery prospects.
“These guarantor companies have some commercial buildings in Mumbai’s Andheri area which can be of value. Since they are guarantors to the original loans, banks can start a fresh process either through NCLT or outside it to initiate recovery,” said a person aware of the process.
Rajesh Business & Leisure Hotels owes lenders, led by ICICI Bank, more than ₹621 crore. In March lenders had unanimously voted for the Rare Asset Reconstruction Co and Naman Group consortium to take over the company’s defunct hotel business in Mumbai and had filed a requisite proposal in the NCLT.
The Rare-Naman Group consortium had offered ₹461 crore upfront in cash with another ₹31 crore in equity, a 74% recovery for lenders without taking into account the equity upside. However, lenders say the recovery could be higher as there are assets linked to the companies that have given the corporate guarantee, even as the NCLT approval has been delayed by close to six months.
