L&T Realty, Nir­mal Ink Pact to De­velop Mu­lund Land Par­cel

L&T Fi­nance to fund pro­ject, which has a saleable de­vel­op­ment po­ten­tial of 3m sq ft

The Economic Times - - Companies: Pursuit Of Profit - Kailash.Babar @times­group.com

Mum­bai: L&T Realty, the real es­tate de­vel­op­ment arm of Larsen & Toubro, has en­tered into an agree­ment with Nir­mal Lifestyle De­vel­op­ers to jointly de­velop a nearly 20-acre land par­cel on LBS Marg in Mum­bai’s north cen­tral sub­urb of Mu­lund.

The pro­posed de­vel­op­ment will be funded by L&T Fi­nance to the tune of .₹ 570 crore. About .₹ 400 crore of this fund­ing will be used to re­deem NCDs of Green Maiden A 2013 Trust, Ko­tak In­vest­ment Ad­vi­sors and INQ Hold­ing — act­ing through Deben­ture Trustee IDBI Trus­tee­ship Ser­vices. The bal­ance is ex­pected to be used for the pro­ject, which has a saleable de­vel­op­ment po­ten­tial of around 3 mil­lion sq ft, and is ex­pected to gen­er­ate an es­ti­mated rev­enue of .₹ 5,500 crore over the next 7-8 years.

Ac­cord­ing to Dharmesh Jain, chair­man, Nir­mal Lifestyle De­vel­op­ers, the com­pany has more than 1 crore sq ft of bal­ance de­vel­op­ment po­ten­tial in Mu­lund and is plan­ning to line up more such part­ner­ships. “We are in talks to ex­e­cute more such part- ner­ships go­ing for­ward,” Jain told ET. L&T Realty con­firmed the agree­ment with Nir­mal Lifestyle. On March 23, ET had re­ported that the de­vel­oper was look­ing to mon­e­tise its land parcels. It is keen on a joint de­vel­op­ment pact as that would help it get fu­ture rev­enues apart from an up­front pay­ment.

Re­cently, the Debt Re­cov­ery Tri­bunal had, in re­sponse to a pe­ti­tion filed by IDBI Trus­tee­ship Ser­vices, di­rected the de­vel­oper not to sell any of its prop­er­ties. The com­pany was as-


ked to dis­close all mov­able and im­mov­able as­set.

The ob­jec­tive be­hind the pro­posed trans­ac­tion is to sup­port part re­pay­ment of the com­pany’s debt cur­rently at more than .₹ 1,800 crore with an an­nual cost of debt of about 20%. The de­vel­oper had ac­quired the said land par­cel in Mu­lund (west) from an­other Mum­baibased realty de­vel­oper in 2005.

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