BDO appointed to seek expressions of interest for Adlabs

22 August 2019 2 min. read

A new report from Livemint has revealed that accounting and advisory firm BDO has been tapped to facilitate the expressions of interest (EOIs) process for Adlabs Entertainment. The firm has been appointed by a consortium of creditors to the entertainment entity, which is led by the Union Bank of India.

Adlabs has a long history in India’s entertainment sector, having started in the film and media domain, before expanding into other recreational projects such as theme parks. The firm’s most notable project is Adlabs Imagica – a 300 acre theme park located between Mumbai and Pune.

In recent years, the company has found itself in a world of financial trouble, which was further exacerbated by the withdrawal of its private equity backer ICICI Venture earlier this year. The withdrawal was motivated by dire financial circumstances at Adlabs, which last year faced debt of more than Rs. 1000 crore.

Since ICICI Venture’s departure, the consortium of Adlabs’ creditors has grown increasingly restless. Alongside the Union Bank of India, the consortium consists of Corporation Bank, Bank of Baroda, Vijaya Bank, Life Insurance Corporation and Tourism Finance Corporation of India.

BDO appointed to seek expressions of interest for Adlabs

Corporation Bank initiated an insolvency against Adlabs in June, on the grounds of a default of nearly Rs 70 crore. Livemint reports that the Union Bank of India alongside the other creditors is now looking to sell Adlabs, to which end it has appointed BDO to find potential interested parties.

The deadline for submitting EOIs has been set on the 21st of August, and bidding for the firm’s assets is likely to take place some time in the second week of September. Companies that bid for Adlabs must have a net worth of more than Rs 50 crore, as of the most recent financial statement.

Eligibility to bid also extends to asset reconstruction entities that hold registrations with the Reserve Bank of India, although these entities must have assets under management in excess of Rs. 500 crore to submit a bid. As per the invitation for EOIs, offers will be made on a “100% cash basis.” 

BDO's work for Adlabs is the latest in a string of consulting appointments relating to non-performing assets (NPAs) in India. Banks across the country are contending with monumental volumes of NPAs, leading some to suggest major banking reforms, while others look to maximise their assets in this scenario.