Some such prominent properties under the hammer, such as the Westin Kolkata Rajarhat, have drawn interest from several bidders.
Similarly, investors and strategic buyers are also closely observing the resolution process of Viceroy Hotels, operator of Marriott Hyderabad and Courtyard Marriott Hyderabad, and Mumbai-based V Hotels, owner of Tulip Star, erstwhile known as Centaur Hotel Juhu.
“We are seeing an increasing interest from some of our clients to acquire hotel assets through the insolvency resolution process,” said Megha Agarwal, associate partner at law firm ELP. “Creditors usually take a haircut under resolution plans, which would not be the case in a simpliciter acquisition.” Typically, a simplicitor acquisition is such that a buyer is acquiring an asset at a premium to the market price since it is not sold under any debt reduction plan.
The hospitality sector was among one of the worst-hit due to the Covid-19 pandemic, when several hospitality companies, particularly the owners of single hotels or resort properties, were admitted into the resolution process for loan defaults.
Now, such hotels are seeing interest from two sets of bidders – those who already own hotel properties and those willing to own such properties for the time being before they sell to someone else. Nishith Dhruva, managing partner of law firm MDP & Partners, said assets with all the required licences and readily available infrastructure are ideal brownfield acquisitions that may be put to use from day one. “Buyers are interested in these assets because the new owners are getting clean assets, free from any liabilities at a very competitive price, making the acquisition an attractive proposition for them,” Dhruva said.
