In a recent development, the NCLT i.e. National Company Law Tribunal sanctioned time till 28th May to luxury hospitality chain Hotel Leelaventure and JM Financial Asset Reconstruction Company to resolve the issues ahead of its ongoing sale to Canadian fund Brookfield.

Earlier in March, the Brookfield Asset Management Company agreed to acquire four hotels and a land parcel in Agra from Hotel Leelaventure for Rs. 3,950 crore. However, the deal is yet to be finalized.

An NCLT bench of two-member VP Singh and Ravikumar Duraisamy recently directed Hotel Leelaventure and JM Financial ARC, who owns a majority stake in the luxury hotel chain for some years now, to submit a settlement agreement by 28th May. This is when the tribunal will conduct next hearing of the case.

However, Hotel Leelaventure has sought three to four months’ time to settle the issue, but the tribunal gave them time only till 28th May.

On the other hand, in January, JM Financial ARC filed insolvency application against the Mumbai-based hotel chain that owes approximately Rs. 5,900 crore to lenders.

The Hotel Leelaventure is represented by Dhir & Dhir Associates’ Ashish Pyasi sought three-four months more to come at a settlement citing the ongoing deal with Brookfield. But the tribunal denied the plea and gave time till May-end.

Both Brookfield and Hotel Leelaventure went into a deal of Rs. 3,950-crore excluding the flagship Mumbai hotel, that is facing a legal dispute with the Airports Authority of India  [AAI] over the land lease, and also a land parcel in Hyderabad that the group is developing in a joint venture with Prestige Developers.

The Leela owns five hotels with more than 1,400 rooms, in New Delhi, Bengaluru, Chennai, Mumbai and Udaipur.

The Brookfield-Leela deal will also entail buying the Leela brand, existing and all its upcoming management contracts apart from absorbing the employees of these four hotels being taken over by the Canadian fund.