Creditors to Smaaash optimistic about recovery of dues

Lenders are expecting almost full recovery of their dues in Smaaash, a sports-centric digital entertainment company backed by cricketer Sachin Tendulkar, as its revenues have improved over the last few months, said people with knowledge of the matter.

Smaaash Entertainment Pvt Ltd (SEPL) was admitted by the Mumbai National Company Law Tribunal (NCLT) following a default of ₹292.4 crore to

Asset Reconstruction Company. The company suffered losses since it was shut for 18 months during the Covid-19 pandemic, but revenues improved after the Covid-related restrictions were lifted.

“Several entertainment companies have shown interest in acquiring Smaaash due to change in the outlook post-Covid. After two years of lockdown, people are more inclined to spend for entertainment,” said one of the persons cited above. The resolution professional Bhrugesh Amin has set August 8 as the deadline to submit expressions of interest.

The company has generated ₹34.5 crore in revenue in the first quarter of this financial year against ₹46 crore for FY22. Operating profit or Ebitda (earnings before interest, taxes and amortisation) for the first quarter ending June 2022 stood at ₹11.3 crore against ₹14 crore in the last financial year, people cited above said.

The resolution professional, backed by BDO India, has admitted ₹426.26 crore claims from Edelweiss ARC, Mabella Investment Advisors, Sidbi and

.

Smaaash, which launched operations in 2012, has 12 entertainment centres across ten cities and three more centres are under development. The area of the existing centres is 150,000 square feet.

Smaaash Leisure, a wholly owned subsidiary of SEPL, is an additional attraction, the people said. It operates bowling alley centres across India and has an enterprise valuation of about ₹100 crore with a debt of ₹45 crore from Yes Bank, they said.

Most of the entertainment centres are situated in malls, which have witnessed a rise in footfalls. A report dated August 3 by rating company

stated, “Rising footfalls following the withdrawal of Covid-19 restrictions is expected to shore up the revenue of mall operators well above the pre-pandemic level this fiscal, compared with 70% of that mark last fiscal.”

Shripal Morakhia, who promoted Smaaash, formally owned stock broking and investment firm SSKI-Sharekhan. Morakhia promoted AHA Holdings owns 42.8%, while Sachin Tendulkar owns 4.2%, the people cited above said.

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