DSK Legal advised and assisted Imagicaaworld Entertainment Limited, a public listed company whose equity shares are listed on BSE Limited and the National Stock Exchange of India Limited and whose registered office is situated at 30/31, Sangdewadi Khopoli Pali Road, Taluka-Khalapur, Khalapur, Raigarh – 410 203, Maharashtra, India (“Company”) in relation to the Resolution Plan/Offer (as amended/modified from time to time) submitted by Malpani Parks Indore Private Limited (“MPIPL” or “Acquirer”) in the open competitive bidding process undertaken by Union Bank of India (as the lead bank on behalf of the lenders of the Company) for the solicitation of binding bids from eligible bidders for assignment/one-time settlement of the debt obligations of the Company in accordance with the requirements of the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (collectively, the “Resolution Plan”).

The Company owns and operates the park based at Khopoli by the name and style of ‘Imagicaa’, consisting of a theme park, water park and snow park and a hotel under the name of ‘Novotel Imagicaa Khopoli’.

Key Terms of the Resolution Plan:

The Resolution Plan submitted by the Acquirer envisaged the settlement of the outstanding loans availed by the Company from its lenders against payment of INR 500,00,00,000/- (Indian Rupees five hundred crore only) which was paid as purchase consideration for assignment of the outstanding debt of the lenders of the Company by the securitization trust(s) of Aditya Birla ARC Limited, an asset reconstruction company (“ARC”) and issuance and allotment of listed equity shares worth INR 75,00,00,000/- (Indian Rupees seventy-five crore only) at the prevailing market price (as determined basis the ‘relevant date’) to the lenders of the Company (in proportion to their respective exposure) against an equivalent amount of the outstanding debt due to the lenders of the Company.

For the aforesaid settlement of the outstanding debt due to the lenders of the Company, the Acquirer (through its nominee, Malpani Parks Private Limited) subscribed to the listed equity shares of the Company for an aggregate value of INR 415,00,00,000/- (Indian Rupees four hundred and fifteen crore only) pursuant to a preferential allotment by the Company as per the requirements of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”) and the Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers) Regulations, 2011 (“SEBI Takeover Regulations”), which resulted in transfer of management and control of the Company in its favour (“Preferential Allotment”).

The ARC also acquired from all the lenders of the Company balance outstanding debt (together with all underlying security interest and guarantees provided by promoters/third-parties) for a consideration amount of INR 500,00,00,000/- (Indian Rupees five hundred crore only). The Company utilized the amount of INR 415,00,00,000/- (Indian Rupees four hundred and fifteen crore only) raised pursuant to the Preferential Allotment to the ARC against repayment of outstanding debt which was utilized by ARC for payment of purchase consideration against assignment of outstanding debt (together with all underlying security interest and guarantees provided by promoters/third-parties) from the lenders of the Company. The existing promoters of the Company have written-off their entire loan and related dues/liabilities in the Company.

The Company also issued and allotted 20-year zero coupon redeemable preference shares for an amount of INR 500,00,00,000/- (Indian Rupees Five hundred crores only) to the ARC. All remaining amounts of the assigned outstanding debt would either be restructured (through conversion into preference shares or other instruments) or written-off by the ARC on such terms and conditions as agreed between the ARC and the Acquirer.

Our role:

DSK Legal advised and assisted the Company in, inter alia:

        1. Advising on and addressing various legal queries in relation to the investment in listed equity shares by way of Preferential Allotment by the Acquirer (through its nominee, Malpani Parks Private Limited), the acquisition of outstanding debts by the ARC and the one-time settlement of the debts by the ARC as well as implementation of the Resolution Plan;
        2. Structuring and advising on the legal strategy and way forward with respect to the investment in listed equity shares by way of Preferential Allotment by the Acquirer (through its nominee, Malpani Parks Private Limited), the acquisition of outstanding debts by the ARC and the one-time settlement of the debts by the ARC;
        3. Drafting, reviewing, negotiating and finalizing the drafts of the transaction documents for the investment in listed equity shares by way of Preferential Allotment by the Acquirer (through its nominee, Malpani Parks Private Limited), the acquisition of outstanding debts by the ARC and the one-time settlement of the debts by the ARC including the Investment Agreement, the Debt Restructuring cum Settlement Agreement and the Memorandum of Understanding (collectively, the “Transaction Documents”);
        4. Advising and assisting in relation to Preferential Allotment in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and for implementation of the terms and conditions of the Resolution Plan including drafting of the necessary documents in relation thereto;
        5. Advising on requisite regulatory filings pertaining to the aforesaid transactions and the Transaction Documents;
        6. Advising and assisting on closing of the aforesaid transactions including advising and assisting on the fulfilment of conditions precedent, drafting/reviewing of the conditions precedent documents, closing documents, etc. as may be required for effectuating the aforesaid transactions and reviewing completion deliverables and the corporate secretarial documents;
        7. Providing our legal opinion with respect to closing of the aforesaid transactions for the management and key managerial personnel of the Company; and
        8. Providing other necessary legal assistance with respect to the implementation of the Resolution Plan.

        DSK team for the transaction:

        The DSK team representing the Company for all aspects with respect to the aforesaid transactions comprised of Mr. Ajay Shaw (Partner), Mr. Ashish Pahariya (Partner), Mr. Soham Mookherjee (Principal Associate) and Ms. Anisha Kumar (Principal Associate).

        Other advisors for the transaction:

        IMAP India acted as the exclusive strategic and financial advisor to the Company.

        Link Legal advised and assisted the Acquirer and Malpani Parks Private Limited for the transaction.

        Edelweiss Financial Services acted as exclusive financial advisor to the Acquirer and Malpani Parks Private Limited for the transaction.

        Ernst & Young conducted the financial and tax due diligence for the Acquirer and Malpani Parks Private Limited.

        BDO advised the Acquirer and Malpani Parks Private Limited on various tax matters.

        Cyril Amarchand Mangaldas advised and assisted the lenders of the Company for the transaction.

        BOB Capital Markets Limited acted as the transaction advisor for the lenders of the Company.

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