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Mumbai: Lenders to have issued a letter of intent (LoI) to Ahmednagar-based Malpani Group to take over the debt-laden theme park company, bringing the seven-month-old resolution process one step away from completion, said two people close to the development.
The LoI was issued on Friday after some last-minute drama when a new bidder made an enquiry in the Swiss challenge round, they said. "A little known US-based investor made an application in the Swiss challenge round and, according to norms, banks gave them a couple of days to deposit ₹15 crore as guarantee, which they could not fulfil, and, as a result, Malpani has been declared the winning bidder," a person involved in the deal said.
According to the terms agreed to by lenders, Malpani's offer totals ₹575 crore. Under the proposed deal, the Malpani Group will get a 70% stake in Imagicaaworld valued at ₹500 crore, and lenders will hold a 13% stake, worth ₹75 crore. This constitutes a 59% haircut for lenders led by .
Current promoter, noted Bollywood producer Manmohan Shetty, will also hold a residual stake in the company post the deal.
Malpani's interest in Imagicaa was first reported by ET in October 2021. Lenders initiated a one-time settlement with the current promoter outside the bankruptcy process to ensure a quick resolution.
The structure of the deal was changed to avoid an open offer and other regulatory approvals which would be time consuming.
The deal now envisages two transactions - Aditya Birla ARC will purchase the debt from banks and transfer it to Malpani Group, which will take equity stake in the company.
The Malpani board is likely to meet on June 10 to approve the transaction, said the person quoted above. Union Bank of India is the largest creditor to the company with a principal loan of ₹323 crore, followed by at ₹237 crore.
Imagicaa owns multiple theme parks around Mumbai and Pune. Shetty owns 31% of it directly and indirectly.
"The deal now is that Malpani will issue shares to the lenders at ₹15.50 a piece, which is higher than what was envisaged earlier and could lead to lower number of shares for banks, but lenders are confident that they can make up with the upside in valuations in the future," a second person aware of the transaction told ET.
Imagicaa has been facing financial pressures due to rising costs in the last couple of years. These pressures have been compounded due to the Covid-19 pandemic, which shut down theme parks across the world.
The LoI was issued on Friday after some last-minute drama when a new bidder made an enquiry in the Swiss challenge round, they said. "A little known US-based investor made an application in the Swiss challenge round and, according to norms, banks gave them a couple of days to deposit ₹15 crore as guarantee, which they could not fulfil, and, as a result, Malpani has been declared the winning bidder," a person involved in the deal said.
According to the terms agreed to by lenders, Malpani's offer totals ₹575 crore. Under the proposed deal, the Malpani Group will get a 70% stake in Imagicaaworld valued at ₹500 crore, and lenders will hold a 13% stake, worth ₹75 crore. This constitutes a 59% haircut for lenders led by .
Current promoter, noted Bollywood producer Manmohan Shetty, will also hold a residual stake in the company post the deal.
Malpani's interest in Imagicaa was first reported by ET in October 2021. Lenders initiated a one-time settlement with the current promoter outside the bankruptcy process to ensure a quick resolution.
The structure of the deal was changed to avoid an open offer and other regulatory approvals which would be time consuming.
The deal now envisages two transactions - Aditya Birla ARC will purchase the debt from banks and transfer it to Malpani Group, which will take equity stake in the company.
The Malpani board is likely to meet on June 10 to approve the transaction, said the person quoted above. Union Bank of India is the largest creditor to the company with a principal loan of ₹323 crore, followed by at ₹237 crore.
Imagicaa owns multiple theme parks around Mumbai and Pune. Shetty owns 31% of it directly and indirectly.
"The deal now is that Malpani will issue shares to the lenders at ₹15.50 a piece, which is higher than what was envisaged earlier and could lead to lower number of shares for banks, but lenders are confident that they can make up with the upside in valuations in the future," a second person aware of the transaction told ET.
Imagicaa has been facing financial pressures due to rising costs in the last couple of years. These pressures have been compounded due to the Covid-19 pandemic, which shut down theme parks across the world.
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