Rajesh Lifespaces' Lenders Takes Creative Route to Recover Dues by Invoking Guarantees

The lenders of Rajesh Lifespaces are demanding their money back, putting the company's future at stake.

Lenders of Rajesh Lifespaces in Mumbai are trying to get their money back. They use guarantees made by the promoters to get their money while they wait for permission from the National Company Law Tribunal (NCLT) to sell the company's hotels.

Rajesh Lifespaces, Rajesh Hospitality, and Rajesh Investments had hotel loans. The founders, Rajesh Patel, Harish Patel, and Priyal Patel, provided guarantees for the loans to the companies' insolvent hospitality business. To get the money, the banks led by ICICI Bank are now looking at the properties and assets owned by these companies to get their money back.

According to a source, "These guarantor companies have some office buildings in Mumbai's Andheri area that can be sold to get money. Since they promised to repay the loans if things went wrong, the banks can start a new process, either through the NCLT or another way, to get their money back."

Rajesh Business & Leisure Hotels owes the lenders more than Rs 621 crore. In March, the lenders agreed for Rare Asset Reconstruction Co and Naman Group to take over the company's hotels in Mumbai. They offered Rs 461 crore in cash upfront and Rs 31 crore in company shares. It would amount to a 74% recovery for lenders without considering the company's future potential.

But, the lenders think they can get even more money back because many valuable assets owned by these companies promised to pay back the loans.

Unfortunately, the permission from the NCLT to do this has been delayed by about 6 months.