Lenders change Imagicaa management outside the NCLT process

Lenders change Imagicaa management outside the NCLT process

The entertainment company's assets included a theme park set up by film producer Manmohan Shetty

A consortium of 10 lenders led by the Union Bank of India have assigned their debt exposure in an amusement park firm Imagicaaworld Entertainment Ltd. to Aditya Birla ARC for Rs.500 crore and picked up a 10 percent stake in the company.

This is a one-of-its-kind debt resolution under the Reserve Bank of India guidelines and outside the National Company Law Tribunal (NCLT) process.

"The assignment was undertaken under the RBI guidelines of Prudential Framework for Resolution of Stressed Assets dated 7 June 2019 leading to a 'Change in Management' with the lenders becoming equity shareholders as well," remarked BOB Capital Markets Ltd., the 100 percent subsidiary of Bank of Baroda and the sole process advisor to the lenders.

The Malpani Group (MPG), a Maharashtra-based diversified business group with a presence in the amusement park business, has acquired a majority and controlling stake in Imagicaa by infusing Rs.415 crores for preferential allotment of the shares.

Imagicaa's account had an NPA of about Rs.1,000 crores and with interest, the total exposure was estimated at Rs.1,400 crores.

Meanwhile, the banks have received the shares by converting part debt. Their shareholding in the company is now about 10 percent. They have also recovered Rs.500 crores from debt assignment to Aditya Birla.

BOB Capital stated that the overall recovery to the lenders was 57 percent. Imagicaa's assets included an amusement park, hotel and land. The theme park, located at Khopoli (between Mumbai and Pune), was set up by film producer Manmohan Shetty and in 2013, it was opened to the public.

While BOB Capital acted as the sole process advisor to the lenders, Cyril Amarchand Mangaldas acted as the legal advisor.