INSUBCONTINENT EXCLUSIVE:
Hotel Leelaventure's shareholders have overwhelmingly backed the proposal to sell key hotel assets to Brookfield Asset Management though
the transaction cannot go ahead till the capital markets watchdog completes its investigation into complaints made by key Leela shareholders
Nearly 86 per cent of all shareholders voted in favour of the resolution with institutional and non-insitutitonal shareholders supporting
it by over 70 per cent, a Leela notice to the shareholders showed
The results were released to the public after Securities and Exchange Board of India allowed Leelaventure to do so
The market regulator had asked the firm and Brookfield to hold off on proceeding with the transaction earlier in the week after two key
shareholders ITC and LIC complained of some irregularities
While all the promoters polled in favour of the deal, 74.87 per cent of public institutional investors and 74.9 per cent of
non-institutional public investors who cast their votes also backed the move
It is not known how LIC and ITC voted
Voting through postal ballot began on March 26 and ended on April 24
Meanwhile, it has emerged that ITC which in an unexpected move approached the National Company Law Tribunal earlier this week challenging
the deal, had abstained from voting in 2017 when JM Financial Asset Reconstruction Company (JMFARC) moved a special resolution to convert
People close to the development said that the cigarettes-to-hotels major also did not engage in talks to buy the assets when approached by
Lenders are interested in recovering their money as much as possible and as fast as possible
banking source familiar with the developments
also approached Sebi, complaining that the deal violated rules on related-party transaction
stake in the company after the conversion of debt into equity.
On September 3, 2018, ET reported that Brookfield and Leelaventure were in
cent did not come out of thin air
As per the 2013 corporate debt restructuring documentation, the lenders have the right to convert their loan into equity which was approved
ITC abstained from voting in that resolution
If they had said negative vote at least they had some grounds to complain now
an enabling provision to issue up to 125 crore equity shares in one or more tranches to JMFARC, which currently holds most of its debt
14 lenders will have to give up on some of the money outstanding, experts said.
In its petition to the NCLT, ITC alleged JMFARC had moved a
petition in the tribunal in January this year against Leelaventure with an intent to pressurise the promoters to dispose of their business