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Singapore's Vantage Point Asset Management has acquired the financially troubled Alchemist Infra Realty for approximately INR 470 crore through a bankruptcy process. The National Company Law Tribunal (NCLT) approved the acquisition, with lenders unanimously supporting the revival plan. Initially triggered by a default on INR 401 crore in dues, the resolution plan aims to address INR 1,293 crore in claims. Experts suggest that takeovers are crucial for reviving stalled real estate projects. Despite legacy challenges, rising property values and investor interest indicate potential recovery for the Indian real estate sector.
A Delhi-based real estate company, Alchemist Infra Realty, has found a new owner after facing financial troubles. Singapore's Vantage Point Asset Management has successfully acquired the company through a bankruptcy process. This decision marks a significant step in resolving the financial distress of the Delhi-based real estate firm. The resolution professional overseeing Alchemist Infra Realty received claims totaling INR 1,293 crore, and Vantage Point will pay about INR 470 crore to acquire the company through the insolvency resolution process. Advertisement
Before the National Company Law Tribunal (NCLT) approved the acquisition, the lenders of Alchemist Infra Realty unanimously supported the revival plan proposed by Vantage Point Asset Management. This plan is now binding on all parties involved, including employees, creditors, and other stakeholders.
The tribunal has instructed Vantage Point Asset Management to provide an updated bank guarantee that will remain valid until the resolution plan is fully implemented. Initially, Alchemist Infra Realty's financial creditor, Technology Parks Ltd, approached the tribunal after the company defaulted on dues amounting to INR 401 crore. In March 2022, Alchemist Infra Realty entered the corporate insolvency resolution process (CIRP), with Gaurav Mishra appointed as the resolution professional. The fair market value of the bankrupt firm's assets was estimated at INR 380 crore, and its liquidation value at INR 302 crore, indicating that Vantage Point's offer exceeds both values.
Industry experts suggest that the takeover by a new company is often the only viable solution to revive stalled real estate projects in northern India. Despite numerous tribunal approvals for such acquisitions, legacy issues frequently impede progress. However, the recent rise in property and land prices has sparked increased interest from investors and developers, making these projects more viable.
According to data from the Insolvency and Bankruptcy Board of India, 7,567 companies across various sectors have been brought into administration since the inception of the Insolvency and Bankruptcy Code in 2016. Of these, 1,589 companies, or about 21%, are from the real estate sector. Around 15% of the total companies admitted under CIRP that witnessed revival or acquisition were from the real estate sector.
This acquisition highlights the ongoing challenges and opportunities within the Indian real estate market. With rising property values and increasing investor interest, the sector is poised for potential recovery and growth, provided that resolution plans are effectively implemented and legacy issues are addressed.
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