In a board meeting held on Wednesday, the Board of Directors of Bombay Dyeing and Manufacturing Company (BDMC) approved the proposal to sell the land parcel of about 22 acres (along with the associated FSI) in Worli, Mumbai to Goisu Realty, a subsidiary of Sumitomo Realty & Development Company in 2 phases, for about Rs. 5,200 crore, subject to approval of its Shareholders.
As per company’s official statement, 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 & consummation of the definitive agreements thereto for Phase- II.
Commenting on the proposed transaction, Nusli Wadia, Chairman BDMC said, “I am happy to inform that BDMC is entering into agreements with Sumitomo group for sale of about 22 acres of land, along with the associated FSI, in Worli, Mumbai for a total consideration of about Rs. 5,200 crore. 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, report a strong positive net worth, 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 Board of Directors of BDMC had charted out a strategy in March 2022 to change the company’s trajectory which envisaged focusing on realty business for future growth and profitability, accelerating sale of flats in Island City Center, Dadar [ICC], monetising its land bank, deleveraging the company by retiring its borrowings & improving credit ratings, and developing the unutilised land parcels of the Company.
Wadia further added, “We are happy to report that BDMC was able to generate a Net Revenue of about Rs. 1,050 crore between April 2022 and June 2023, through sale of the flats in ICC by focused execution, leading to a reduction in the Company’s borrowings by about Rs. 900 crore in the same period.”
As per the statement, with a view to deleverage and strengthen the balance sheet of the company for funding future real estate projects, the board decided to monetise BDMC’s land parcel at Worli, Mumbai, after evaluating various other options.
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 Rs. 15,000 crore over the next few years. The development will be planned judiciously in phases to manage 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.