Bombay Dyeing would sell Goisu Realty Worli site for Rs 5,200 crore

Bombay Dyeing and Manufacturing Company Limited (BDMC), a company owned by the Wadia group, announced on Wednesday that it has agreed to sell 22 acres in Worli to Goisu Realty Pvt, a subsidiary of Sumitomo Realty & Development Company Limited, for 5,200 crore. The sale will be used to pay off debt and fund future projects.

According to a filing with the stock exchange, the company's board of directors approved the proposal on Wednesday to sell the 22-acre land block in Worli in two phases for a total of around 5,200 crores, subject to approval from shareholders.

“Upon the 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 & consummation of the definitive agreements thereto for Phase- II," the BDMC said.

To reduce debt and improve its balance sheet so that it can finance future real estate developments, the plan to monetize the land piece has been approved, according to the BDMC.

“The board has also, in-principle, approved the development of the unutilized 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 ₹15,000 crores over the next few years. The development will be planned judiciously in phases to manage company’s cashflows efficiently. The company will also evaluate other joint development and partnership opportunities to create a steady pipeline of future revenue and profits," the company added.

The BDMC also stated that when the proposed deal is completed, the company would be able to report a pre-tax profit over 4,300 crores, cancel off all of its debt, and pay dividends in the future. These benefits will result in savings on interest costs and the release of the charge on encumbered assets.