Majestic Auto Ltd Executes Consent Agreement with ARC for Sharan Hospitality Resolution Plan
Majestic Auto Ltd has reached a settlement agreement with Assets Care & Reconstruction Enterprise Limited (ARC) regarding the implementation of the Resolution Plan for Sharan Hospitality Private Limited (SHPL). The agreement, finalized on July 15, 2026, allows the company to move forward with the resolution process after settling disputes with ARC, which holds the financial assets relating to SHPL.The settlement follows a period where Axis Bank Limited, the financial creditor of SHPL, initiated liquidation proceedings against the company. These proceedings were subsequently set aside by the National Company Law Tribunal (NCLT), permitting the continuation of the Resolution Plan. Subsequently, Axis Bank Limited assigned its financial assets related to SHPL to ARC through a competitive assignment process.
Majestic Auto Ltd informed stakeholders that it executed the Consent and Dispute Settlement Agreement with ARC on March 3, 2026, following approval by its Board of Directors. The settlement aims to facilitate the resolution process of SHPL by finalizing matters with the lender (ARC).
In connection with financing this resolution, Majestic Auto also entered into related inter-related transaction documents, including a Securities Purchase Agreement. These arrangements involve identified purchasers and include escrow and funding structures for the proposed transfer of securities intended to be issued to the Company during the Resolution Plan implementation.
The successful implementation of the Resolution Plan is contingent upon several factors, including the execution of this Consent Agreement, settling matters with the lender (ARC), and receiving an order from the Hon'ble Supreme Court.
The financial structure for the Resolution Plan implementation involves two key components: payment towards the Resolution Plan Amount of ₹81,84,10,538 (Indian Rupees Eighty-One Crores Eighty-Four Lakhs Ten Thousand Five Hundred Thirty-Eight Only), and an Additional Interest Amount totaling ₹23,58,69,998 (Indian Rupees Twenty-Three Crores Fifty-Eight Lakhs Sixty-Nine Thousand Nine Hundred Ninety-Eight Only). These amounts are subject to orders from the Hon'ble Supreme Court of India.
The agreements executed by Majestic Auto Ltd and its counterparties are detailed below:
| Particulars | Consent Agreement (with ARC) | Securities Purchase and other transaction Agreements (with Purchasers) |
|---|---|---|
| Purpose | To record the settlement arrived at with ARC regarding SHPL’s Resolution Plan, jointly approaching the Supreme Court to facilitate implementation. | To define the framework for the proposed transfer of securities, along with escrow and funding arrangements, subsequent to the Settlement and resolution of the case before the Hon'ble Supreme Court. |
| Parties | Assets Care & Reconstruction Enterprise Limited (ARC) | Novum Lake Property Fund and 360 ONE Real Assets Advantage Fund (Purchasers), alongside related transaction counterparties. |
| Shareholding in Entity | Nil | Nil |
| Significant Terms | The Agreement does not confer special rights such as the right to appoint directors, pre-emptive rights, or restrictions on the capital structure of the Company. | The Agreements cover the proposed transfer of securities for an agreed consideration and do not confer any special rights such as appointment of directors or restrictions on capital structure. |
| Relationship | ARC is not related to the Promoter, Promoter Group, or Group Companies of the Company. | No relationship exists between the Purchasers and the Promoter/Promoter Group of the Company. |
| Related Party Transaction? | No. The Agreement does not constitute a related party transaction. | No. The Agreement does not constitute a related party transaction. |
MAJESAUT Stock Price Movement
On Wednesday, Majestic Auto Limited shares surged by 5.76%, closing at ₹386.65 after hitting a high of ₹389.5 during trading sessions. The strong performance was supported by the significant demand, as the equity traded amidst a volume of 15,156 shares.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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