Eraaya Lifespaces issues clarification against litigation invoked by Vikas Lifecare | Stock Market News
Source: Live Mint
Eraaya Lifespaces shares are one of the multibagger small-cap stocks under ₹100 that the Indian stock market has delivered in recent years. The small-cap stock will be in focus when trading resumes on Monday. The small-cap stock under ₹100 received sell-off pressure on Friday after the litigation raised by Vikas Lifecare in connection to the acquisition of Ebix Inc. Both companies informed the Indian exchanges about the development via exchange filing.
Charges labelled by Vikas Lifecare
In an exchange filing to the BSE, Vikas Lifecare said, “We wish to inform you that the Company i.e. Vikas Lifecare Limited, as member of the Consortium led by Eraaya Lifespaces Limited (Eraaya), which acquired Ebix Inc., under Chapter 11 proceedings from U.S. Bankruptcy Court, had contributed USD 34.827 million towards the bid amount and, in pursuit of its rightful claims, has issued a Notice to Eraaya under Section 21 of the Arbitration and Conciliation Act, 1996, invoking arbitration, and with mutual consent appointed Hon’ble Mr. Justice (Retd.) Vinod Goel as the Sole Arbitrator.”
Clarification by Eraaya Lifespaces
Issuing a clarification against the litigation invoked by Vikas Lifecare, Eraaya Lifespaces said, “Eraaya Lifespaces Limited (“Eraaya”) led a consortium for the purpose of acquiring Ebix Inc., which was under the Chapter 11 proceedings before the U. S. Bankruptcy Court, and as part of raising funds for acquisition, on May 24, 2024, (“Agreement”) Eraaya had entered into an agreement with M/s Vikas Lifecare Limited (“VIKASLIFE”) and in terms of the Agreement, VIKASLIFE had contributed/paid USD 34.827 Million towards the bid amount. However, before the completion of the acquisition process, the inter-se terms between the parties were amended on August 16, 2024 vide an Addendum to the Agreement which was executed between Eraaya and VIKASLIFE to record the repayment terms and consequences of non-payment thereof.”
“Acquisition of Ebix Inc. was successfully completed on August 30, 2024. However, the repayment of the amounts to VIKASLIFE could not be completed in accordance with the agreed timelines as set out between the parties, as the balance proceeds amounting to USD 40 Million of Eraaya’s FCCBs Issue, have not yet been released by the intermediaries engaged by it to facilitate the FCCB issue, and Eraaya has initiated appropriate steps to recover the same separately. In the meantime, VIKASLIFE has invoked the Arbitration Clause of the Agreement, and issued Notice under Section 21 of the Arbitration and Conciliation Act, 1996 and proposed three names of Retd. Judges of High Courts, to be appointed as Sole Arbitrator,” Erraya Lifespaces added.
However, Eraaya Lifespaces maintained that without prejudice to all its rights and contentions and expressly reserving its legal rights to contest the underlying matters, it consented to appoint Hon’ble Mr Justice (Retd.) Vinod Goel, Former Judge of the High Court of Delhi, is the sole arbitrator. This consent is made with the clear understanding that Eraaya will vigorously assert its rights and pursue all available legal avenues in the dispute before the Ld. Arbitral Tribunal.
“Though the amount contributed by VIKASLIFE towards the acquisition of Ebix, Inc. bid is duly acknowledged,” Eraaya Lifespaces concluded in its exchange filing.
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