The Hon’ble National Company Law Tribunal (“NCLT”) has on 9th January 2023 approved the resolution plan submitted by Adani Goodhomes Pvt. Ltd. for the takeover of Radius Estates & Developers Pvt. Ltd, viz. the special purpose vehicle for the Ten BKC Project.
Ten BKC is a centrally located landmark residential project in Mumbai launched in 2015-16. The project was at an early stage of construction but got stalled in January 2020 on account of the various difficulties faced by Radius Estates & Developers Pvt. Ltd. The Society terminated its arrangement with the developer and were willing to continue with the project inter-alia if the construction resumed immediately. The situation was further aggravated when certain financial creditors dragged Radius Estates & Developers to the Hon. NLCT, under the Insolvency and Bankruptcy Code.
This left 176 Society Members and approx. 400 homeowners in a precarious position with little visibility on completion of the project. Several of them had taken mortgage loans and were living on rent causing severe duress and financial burden. Given the project was still at an early stage of construction with more than 220 slabs yet to be cast, the incoming developer would have had to incur huge costs of over Rs. 1,000 Cr costs to complete the project.
With the support of the existing joint venture partner MIG (Bandra) Realtors & Builders Pvt. Ltd., Adani Goodhomes stepped in and submitted a resolution plan to keep the project afloat. Adani Goodhomes submitted a resolution plan to complete the project without charging any additional consideration to the homeowners.
Despite the complexities, the resolution plan submitted by Adani Goodhomes was approved by an overwhelming 83% of the Committee of Creditors in December 2021 post which Adani Goodhomes infused fresh funds for immediate resumption of construction. In the interest of the project, besides the consideration as per plan, Adani Goodhomes gave up claims to over Rs. 200 Cr of assets, over and above claims of Rs. 800 Cr from Radius companies that the COC would be entitled to.
Some minor creditors, who represent ultra-HNI investors, have been continuously opposing the plan, despite having received much higher returns in the past. The Hon’ble NCLT nod offers a respite for stuck & distressed real estate projects and has set a precedent, giving hope to many such affected homeowners. Had Adani Realty not stepped in, Radius Estates & Developers would have gone into liquidation, leaving all homeowners in a lurch.
Homebuyers are relieved with Adani Goodhomes’ takeover of the project. Mr. Ravi Shetty (Chairman, Society) said, "Adani taking over the project has ensured a complete turnaround for the members of the Society who, now more or less, are assured of getting their homes back. It has been over 8 years since we vacated our homes. More than 60% of the members are 70 years and above and, therefore, seeing the light at the end of the tunnel has made all the difference. Almost 2,000 labor working on the site is a huge thing for the Society. It is our endeavor to get our homes back and therefore, we were extremely keen about having a solid developer like Adani in place who would see us through.”
Dr. Abhaya Kumar (homeowner at Ten BKC) said, “All stakeholders have demonstrated transparency in their working through the IBC process. This has given us confidence that our homes will be delivered on time. Adani Realty is a trusted brand in real estate and always prioritizes customers' best interests. The tower is ready and we expect the project to be delivered next year.”
Mr. Ashish Yakhmi (homeowner at Ten BKC) added, "Adani's intent to develop & complete the project gave me peace of mind, knowing that my investment is safe. We greatly appreciate Adani Realty stepping in and starting construction immediately thereby helping us realize our dream of owning a home in Bandra."
Spread across 5 acres, Ten BKC is one of the largest integrated residential complexes in the upscale neighborhood of Bandra. The project features 15 wings with apartments ranging from 2 BHK to 6 BHK triplexes, with configurations from 1,080 sq. ft to 6,068 sq. ft. The property will also include 2.9 acres of open spaces, 5-basement car parking, a sky gym, a 45,000 sq. ft luxury entrance lobby, a luxurious clubhouse with a 30-meter lap pool, a kids' play area and much more.