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In one of the biggest property deals in the financial capital of India, the Wadia Group-owned Bombay Dyeing and Manufacturing Co Ltd (BDMC) has agreed to sell 22 acres of land parcel in the prime Worli area of Mumbai to Goisu Realty Pvt Ltd for Rs 5,200 crore.
The Board of Directors of BDMC on Wednesday approved the proposal to sell the land parcel of about 22 acres (along with the associated FSI) to Goisu Realty Pvt Ltd, a subsidiary of Japanese conglomerate, Sumitomo Realty & Development Co Ltd, in 2 phases, for a total consideration of about Rs. 5,200 crore, subject to approval of its shareholders, the company said on the big land deal.
“I am happy to inform that the BDMC is entering into agreements with Sumitomo group for sale of about 22 acres of land along with the associated FSI in Worli for a total consideration of about Rs 5,200 crore,” Bombay Dyeing Chairman Nusli Wadia said.
Upon approval of shareholders, BDMC will receive about Rs 4,675 crore from the Buyer for Phase-I.
The balance amount of about Rs 525 crore will be received upon completion of certain conditions by BDMC and execution and consummation of the definitive agreements thereto for Phase-II.
On completion of the proposed transaction, the company will be able to record a pre-tax profit in excess of Rs 4,300 crore on account of this transaction resulting in a strong positive net worth.
“It will extinguish all its borrowings thereby saving interest costs and releasing the charge on encumbered assets, pay dividend in future and have a strong treasury balance to fund the future realty projects,” the company said in a statement.
The Board has also, in-principle, approved the development of the unutilised land parcels available with the company, having a potential to create about 3.5 million square feet of residential/commercial property and generate a revenue of about Rs 15,000 crore over the next few years. The development will be planned judiciously in phases to manage the company's cash flows efficiently.
“The company will also evaluate other joint development and partnership opportunities to create a steady pipeline of future revenue and profits,” it said.