malpani: lenders submit a letter of intent to the Malpani group for the acquisition of Imagicaa at Rs 575 crore

Mumbai: Lenders have issued a letter of intent (LoI) to Ahmednagar-based Malpani Group to take over the debt-ridden theme park company, bringing the seven-month-old resolution process one step closer to completion, say said two people close to the development.

The letter of intent was released on Friday after last-minute drama when a new bidder asked a question during the Swiss challenge round, they said. “A little-known investor based in the US applied for the Swiss challenge and by standard the banks gave them a few days to deposit ₹15 crore as collateral which they couldn’t. complete, and, therefore, Malpani was declared the winner,” said a person involved in the case.

Under the terms agreed by the lenders, Malpani’s offer stands at ₹575 crore. Under the proposed deal, Malpani Group will get a 70% stake in Imagicaaworld valued at ₹500 crore, and the lenders will hold a 13% stake, worth ₹75 crore. This constitutes a discount of 59% for lenders led by .

The current promoter, renowned Bollywood producer Manmohan Shetty, will also hold a residual stake in the company after the deal.

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Malpani’s interest in Imagicaa was first reported by ET in October 2021. The lenders have initiated a one-time settlement with the current developer outside of the bankruptcy process to ensure a speedy resolution.

The deal structure was changed to avoid an open bid and other time-consuming regulatory approvals.

The deal now includes two transactions – Aditya Birla ARC will buy the debt from the banks and transfer it to Malpani Group, which will take a stake in the company.

Malpani’s board is expected to meet on June 10 to approve the transaction, the person quoted above said. Union Bank of India is the company’s largest creditor with a primary loan of ₹323 crore, followed by

at ₹237,000,000.

Imagicaa has several theme parks around Mumbai and Pune. Shetty owns 31% directly and indirectly.

“The deal is now that Malpani will issue shares to lenders at ₹15.50 apiece, which is higher than previously contemplated and could lead to lower share counts for banks, but lenders are confident that they can offset the rise in valuations in the future,” a second person with knowledge of the transaction told ET.

Imagicaa has faced financial pressures due to rising costs over the past two years. These pressures have been compounded by the Covid-19 pandemic, which has closed theme parks around the world.

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