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Malpani Group partners Aditya Birla ARC to acquire PE-backed stressed Imagicaaworld
Photo Credit: 123RF.com

Maharashtra-based Malpani Group has acquired majority stake in Jacob Ballas-backed Imagicaaworld Entertainment Ltd. (Imagicaa) for Rs 575 crore ($73 million), as part of the debt resolution plan.  

“The lenders to the Company have completed a debt resolution for Rs 575 crore, which includes assignment of their debt to Aditya Birla ARC (asset reconstruction company) for Rs 500 crore and lenders were also issued equity shares by way of conversion of debt aggregating to Rs 75 crore by the Company,” Imagicaa said in a regulatory disclosure.

Malpani group has acquired 66.25% stake in Imagicaa by way of preferential allotment of equity shares worth Rs 415 crore.  

Imagicaaworld’s stock ended 10% higher in Friday’s trading session. 

As part of the debt resolution plan, the lenders have been allotted equity shares worth Rs 75 crore resulting in a collective shareholding of 11.97% in the Company. The funds infused in the Company by Malpani Group have been used for repayment of debt to Aditya Birla ARC, which operates in India in partnership with private equity player Varde Capital. 

This will also dilute ownership of Imagicaa promoter and Bollywood film producer Manmohan Shetty currently holding over 31% stake in the BSE-listed theme park operator. 

The one-time settlement (OTS) comes after over three years of negotiations between lenders, company and potential buyers. 

As on March 2021, Imagicaa had total debt of Rs 1,417 crore. In 2019, lead lender Bank of India had rejected Shetty’s Rs 575 crore one-time settlement offer on expectations of higher bids. Its other creditors include Bank of Baroda, Canara Bank, Bank of India, Central Bank of India, J&K Bank, Indian Overseas Bank, Life Insurance Corporation and Assets Care and Reconstruction Company, an ARC backed by Ares SSG Capital.

In 2019, homegrown private equity firm ICICI Venture exited Adlabs Entertainment Ltd with a huge haircut. A lender to the theme park operator dragged it to the bankruptcy court.  

However, the resolution was finally concluded outside of the insolvency process, in accordance with the RBI’s Prudential Framework for Resolution of Stressed Assets.  

Edelweiss Financial Services acted as exclusive financial adviser to Malpani Group while BOB Capital Markets Limited (BOBCAPS) advised the lenders’ syndicate led by Union Bank of India.  

Additionally, three members of Malpani group - Rajesh Omkarnath Malpani, Manish Madhav Malpani and Jai Manish Malpani - have been inducted on the Board of Imagicaa.  

Publicly listed Imagicaa, formerly Adlabs Entertainment, owns and operates Mumbai-based flagship project Imagicaa, a theme and water park located on the Mumbai-Pune expressway. Spread across 300 acres, the theme park has two dozen rides and expanded as a water park along with a three-star family hotel.

ICICI Venture, which first invested in the company in August 2013, offloaded its entire stake of 11.85%. Another India focused private equity firm Jacob Ballas, focused on mid-market segment, had also come in as pre-IPO investor in 2014 and cumulatively through two of its investment vehicles, continues to hold 5.94% in Imagicaa.  

Imagicaa went public via an initial public offering (IPO) in April 2015.  

“Going forward, it is this trust that shareholders have reposed in Malpani Group, that has increased our responsibility and we ensure to do our best to create long term and sustainable value for all the stakeholders and society,” said the board of Malpani Group.  

Ahmednagar-based Malpani Group began operations in 1894 with an FMCG business and is now a diverse group with interests in renewable power, real estate, hospitality, entertainment and education businesses. The group owns and operates four parks in Maharashtra – water parks Wet and Joy in Shirdi and Lonavala, amusement park Magic Mountain in Lonavala and first of its kind devotional theme park Saiteerth Theme Park in Shirdi.  

“We would like to thank the lenders, Malpani Group, Aditya Birla ARC and Mr. Manmohan Shetty, for successfully completing the Debt Resolution plan of the company,” said Dhimant Bakshi, chief executive, Imagicaaworld Entertainment Ltd. 

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