IL&FS puts two office Mumbai buildings, more properties on the block

After selling its iconic headquarters in Mumbai’s business district, crisis-hit non-banking finance company Infrastructure Leasing & Financial Services (IL&FS) has put more commercial properties including two standalone prime properties Business Arcade and IL&FS House in Mumbai on the block.

Monetisation of these key properties, in the business district of Lower Parel and Chandivali, owned by the company and its wholly-owned subsidiaries, is expected to fetch over Rs 700 crore given the locations and size of these properties, property consultants said.

The commercial tower Business Arcade spread over one-fifth of an acre in Lower Parel central business district has a total built up area of 28,591 sq ft. The tower developed on erstwhile Elphinstone Mill property has 14 upper floors apart from two basement and one stilt parking.

IL&FS House in Mumbai’s Chandivali suburb, owned by IL&FS Securities Services, is spread over 0.4 acre with total built up office space of 28,734 sq ft comprising of a basement, ground floor and 6 upper floors.

Apart from these two entire office towers, IL&FS has also put two commercial units spread over nearly 17,000 sq ft in

Chambers on Delisle Road, 1 one unit in Trade World in Lower Parel, 18 offices in Kohinoor Square in Dadar, 23 shops in Virar’s Residency Park and 1 office in Ahmedabad.

These properties are owned and held by IL&FS, its subsidiaries IL&FS Financial Services (IFIN), IL&FS Transportation Networks (ITNL), and IL&FS Securities Services (ISSL). The IL&FS’ board has invited expressions of interest for the proposed asset divestments pursuant to the orders of the dedicated bankruptcy court the National Company Law Tribunal (NCLT) in October, 2018.

IL&FS has invited expressions of interest for these properties until August 1. Consummation of any transaction under this asset divestment process will be subject to requisite approvals including approvals required under applicable law and approval of the NCLT.

IL&FS is monetising its assets with an objective to manage debt obligations. The failure of IL&FS to meet repayment obligations in September 2018 had triggered a liquidity squeeze that gripped India’s non-banking finance sector.

As part of a clean-up, the government then replaced the IL&FS board, which has since been engaged in trying to resolve the debt situation.

“We confirm putting these properties up for sale. Sale of real estate assets forms part of the overall resolution plan undertaken by the new board,” said IL&FS’ spokesperson Sharad Goel. However, he declined to comment on the likely recovery to be made through these deals.

While the term of Uday Kotak, chairman of this government-appointed board, ended on April 2, IL&FS shared that it has addressed debt of Rs 55,000 crore, up from Rs 52,200 crore as of November 2021. The group has retained its overall resolution estimate at Rs 61,000 crore.

Late March, global alternative investment major Brookfield Asset Management emerged as the successful bidder and acquired IL&FS’ headquarters, a 10-storey iconic property in Mumbai’s business district Bandra-Kurla Complex (BKC) for over Rs 1,080 crore.

The debt worth Rs 55,000 crore addressed till date represents over 90% of the overall estimated resolution value. Resolution of remaining Rs 6,000 crore debt has moved into the ongoing financial year 2022-23.

IL&FS’ overall resolution estimate of 62% is double the average recovery of 31% under Insolvency & Bankruptcy Code (IBC). Of the 347 entities under IL&FS Group as of October 2018, a total of 246 entities stand resolved leaving 101 entities to be resolved in the current financial year.

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