NCLT dismisses Chronos Properties' ₹1,080 cr bid for IL&FS flagship BKC property

The National Company Law Tribunal has dismissed the ₹1,080 crore bid by Brookfield-backed Chronos Properties to acquire Infrastructure Leasing and Financial Services Ltd (IL&FS )’s flagship Bandra Kurla Complex property.

The National Company Law Tribunal (NCLT), Mumbai Bench, in its order on November 28, disposed of the application filed by Chronos seeking enforcement of the ₹1,080 crore bid to acquire the IL&FS Financial Centre at BKC.

The tribunal also upheld IL&FS’s contractual right to revise the transaction consideration.

In its order, the tribunal held that the Letter of Intent (LoI) dated March 21, 2022, constitutes a concluded and binding contract between IL&FS and Chronos.

However, the LoI contains clauses which grant IL&FS a unilateral right to amend, modify or supplement the LoI, including financial terms, under the court-approved resolution framework, the order added.

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The tribunal also ruled that the IL&FS letter dated August 16, 2024, which enhanced the consideration from ₹1,080 crore to ₹1,481 crore, is valid and cannot be quashed.

The NCLT further noted that IL&FS had submitted fresh valuation reports indicating an average fair-market value of approximately ₹1,722 crore for the property, and that revising the transaction value aligns with the value-maximisation objective mandated under the resolution process.

On the performance guarantee, the tribunal said that no disqualification arises immediately because IL&FS had not prescribed a renewal timeline and Chronos had signalled its willingness to deposit the guarantee with the NCLT.

The tribunal directed Chronos to tender the performance guarantee (demand drafts aggregating to 10% of the bid) to the tribunal within 30 days, failing which disqualification under the RFP (Request for Proposal) terms shall arise.

Earlier on June 26, IL&FS had approached the NCLT to scrap Chronos’s ₹1,080 crore bid for its flagship BKC property.

In its petition, IL&FS had sought dismissal of the Brookfield-backed bid for its flagship BKC property, the IL&FS Financial Centre (TIFC), citing bidder disqualification and non-compliance with bidding conditions.

IL&FS had alleged that an affiliate of Brookfield Chronos Properties (CPPL) was required to maintain a performance guarantee until the execution of definitive agreements.

The company had emphasised that 'value maximisation' is an important tenet for the public interest board’s mandate under the court-supervised resolution process and approved resolution framework, and sought Brookfield to revise its offer in line with the updated valuation, as per the filing with the NCLT.