Prestige wins $1.4 bn Mumbai housing project
MUMBAI: Prestige Estates Projects Ltd will take over a Mumbai housing project from bankrupt Ariisto Developers Pvt. Ltd following a court decision on Tuesday.
The Bengaluru-based developer plans to launch the first phase of the project by May and second phase toward the end of the year, Prestige’s chief executive officer Venkat K. Narayana said by phone on Wednesday. He estimates revenues of more than ₹10,000 crore ($1.4 billion) from the 7.5 million square feet under development.
“This will be our largest project in Mumbai,” Narayana said.
Prestige shares erased losses to rise as much as 3.8% after the news and were trading up 1.9% as of 1:47 p.m. in Mumbai while the benchmark index was down 1.2%.
Prestige emerged as a top bidder for beleaguered Ariisto in November 2019.
But the proceedings were then stuck in court and further delayed due to the Covid-19 pandemic.
Creditors had combined claims of about ₹2,500 crore, of which Prestige offered to pay ₹1,600 crore, according to company officials with knowledge of the matter, who asked not to be identified as the details are private. The court-appointed insolvency resolution professional Jayesh Sanghrajka declined to comment when reached by phone.
Under the resolution plan, Prestige will pay ₹370 crore upfront to creditors and allot them some 800,000 square feet of fully constructed area, Narayana said.
Creditors include HDFC Ltd, Piramal Group, IIFL and other wealthy individuals and homebuyers.
More than 500 apartments had been stuck for more than a decade as India’s real estate sector saw a series of challenges including a crisis in the shadow banking industry and unfavourable government policies.
PRESTIGE HAD EMERGED AS A TOP BIDDER FOR BELEAGUERED ARIISTO IN NOVEMBER 2019