Calcutta: The race for Gateway Hotel is hotting up with two builders vying for the EM Bypass property, which is facing bankruptcy following loan default.

A company backed by RDB Realty, a partner of the Trump Tower project in Calcutta, may be allowed to match and top Shri Ram Ozone Group's offer for the 180-room hotel.

The Dugar family-owned RDB had emerged as the second highest bidder for the property with an estimated bid of around Rs 105.30 crore. Pradip Sonthalia's Shi Ram, the group that is building 'Fairfield by Marriott' hotel in Rajarhat, quoted Rs 111.11 crore.

The four-year-old Gateway Hotel was developed by Jalan Intercontinental Hotels Limited and managed by The Taj Group under the Gateway brand. According to industry sources, the company's dues to the creditors shot up because of cost escalation following delays in issuing environmental clearances.

After the hotel defaulted on loans, creditors took Jalan Intercontinental to National Company Law Tribunal (NCTL) to be tried under the Insolvency & Bankruptcy Code, 2016. Resolution plans were sought from interested parties to revive the company. Shri Ram and RDB participated in the process.

The committee of creditors had selected Shri Ram as the highest bidder and the resolution plan was expected to be accepted at its meeting on April 26. But shortly thereafter, RDB sought a chance to revise its bid.

During the proceedings before NCLT on Monday, senior advocate Ratnanko Banerjee appeared for Shri Ram and opposed the move of RDB, saying it had not spelt out a higher bid yet. The Calcutta bench of the tribunal, however, observed that it was not in favour of curtailing anybody's rights and called for a meeting of the committee of creditors to decide on the issue. The bench reserved its order after the hearing on Monday.

Sonthalia, director of Shri Ram, said: "We followed due process and was selected H1. There have already been three bids in the past and we came on top every time."

RDB director Vinod Dugar welcomed the tribunal's observation. "Everyone will get a chance," he said

Chequered past

Jalan Intercontinental had taken a term loan of Rs 61 crore from the State Bank of India in 2008 to develop the hotel on a two-acre property. The project cost escalated as the developer borrowed more to complete the project.

The bank transferred the loan to Edelweiss Asset Restructuring Company. Edelweiss made several attempts to find a buyer but failed. The company finally started insolvency proceedings.

The dues the hotel owes have been estimated to be around Rs 167 crore.

"Last year, there was an overall growth in both occupancy as well as room rents. The property may require some investment but any developer will be able to run the hotel given the current trend," said Sudesh Poddar, president of Hotels and Restaurant Association of Eastern India.