Thoothukudi-based Velavan Stores has taken over South Usman Road property of Rathna Stores Private Limited for ₹27.60 crore, through a private sale under liquidation process.
Velavan Stores, established in 1998 by A. Thangavel, has large showrooms in Thoothukudi under the assistance of Saravana Stores, according to its website. The operations are managed by T. Maharajan.
Rathna Stores owed a total of ₹74.86 crore to UCO Bank, ICICI Bank, Canara Bank and Corporation Bank. The Chennai Bench of National Company Law Tribunal (NCLT) ordered commencement of bankruptcy process on November 3, 2017. Since no feasible resolution was found for revival, the NCLT ordered liquidation of the Rathna Stores on September 11, 2018.
Two e-auctions
According to court documents, V. Venkatasivakumar, the liquidator for the company, called for two e-auctions for sale of the property with a reserve price of ₹31 crore, but no one came forward to buy it.
The first e-auction was held on February 11, 2019, but elicited no response. The liquidator went for another e-auction on March 2, 2019, it said.
During the second e-auction, two companies, Kalyan Silks and DMK MP S. Jagathrakshakan’s Accord Hotel, showed interest in buying the property.
However, they backed out citing issues relating to deficiencies in documents of the property and Income Tax attachment on the property.
The NCLT vacated the Income Tax attachment.
After the e-auction failed, the liquidator approached the NCLT seeking approval to sell the property through private sale, citing that Velavan Stores agreed to buy it for ₹27.60 crore, which is 86% of the reserve price.
The NCLT approved the sale, as the purchase price is more than 75% of the reserve price as per norms.
