Appu Hotels Ltd., which owns and operates Le Meridien in Chennai and Coimbatore, is out of the Corporate Insolvency Resolution Process (CIRP) as the National Company Law Tribunal, on Wednesday, gave nod to promoter Palani G. Periasamy’s settlement proposal to the creditors.
In 2020, the National Company Law Tribunal (NCLT) in Chennai admitted an insolvency petition against Appu Hotels in a case filed by the Tourism Finance Corporation of India Ltd.
In May 2023, the Supreme Court upheld the National Company Law Appellate Tribunal (NCLAT) verdict, setting aside the approval given to MGM Healthcare managing director M.K. Rajagopalan for making a ₹423-crore bid to take over Appu Hotels Ltd. under the insolvency process.
Mr. Periasamy made a settlement proposal under Section 12A of the Insolvency and Bankruptcy Code 2016, which was approved by a 100% committee of creditors.
As per the settlement proposal now approved by NCLT, the admitted claims against Appu Hotels were ₹592.30 crore.
The 12A proposal settles the entire claim amount filed against Appu Hotels, and the proposal has been submitted with a definite source of funds for immediate payment by way of a 25% cash deposit in a no lien account with the lead bank and a 75% bank guarantee, as per the legal filings.
The amount offered by the promoter under Section 12A is found to be much more than the other resolution plans submitted for Appu Hotels, it added.
“We are delighted to announce that we are back in the hospitality business,” Mr. Periasamy said, who is also a leading NRI industrialist and chairman of Appu Hotels Limited and the diversified PGP Group.
The COVID-19 and prolonged lockdown had impacted the hospitality business in general and the Appu Hotels in particular. Our finances took a severe hit, leading us into the NCLT framework. But all that is now behind us, he added.
