Kishore Biyani, the Indian businessman and founder of Future Group, has made a surprising offer of Rs 476 crore to lenders for a one-time settlement of the debt of Bansi Mall Management Co (BMMCPL). The debt, which amounts to Rs 571 crore, is associated with SOBO Central Mall in Mumbai’s Haji Ali area. The offer comes as creditors had previously approved a bid of Rs 475 crore from the Runwal Group for the mall through an auction process.
However, Biyani approached the debts recovery tribunal, challenging the lenders’ decision and offering to settle the debt himself. Biyani’s offer has caused a delay in the process, with the court set to make a decision later this month. While lenders have already received Rs 47.5 crore or 10% of the bid amount from Runwal, Biyani’s intervention has put the settlement on hold. SOBO Central Mall, Mumbai’s oldest mall, has been struggling with a lack of tenants and competition from newer shopping centers in the city and suburbs.
Additionally, most of the mall’s real estate has been leased out to Future Group companies, which are under financial stress themselves. Canara Bank and Punjab National Bank (PNB) are the primary lenders with Canara Bank leading with Rs 131 crore of outstanding loans, followed by PNB with Rs 90 crore. PNB and Union Bank of India also have a secondary charge over the mall’s assets due to their lending to Future Brands, another group company, with lease rental discounting of BMMCPL as collateral.
The emergence of Biyani as a bidder suggests that a large real estate and retail developer sees potential in the development of this commercial property in South Mumbai. However, Biyani will need to provide a cash amount upfront to ensure the seriousness of his bid. The recovery potential of the four-storey commercial building has sparked hope among lenders who have suffered significant losses due to the financial troubles of the Future Group. This bid could potentially be a successful recovery for lenders, considering the challenges faced by the Future Group. Overall, Biyani’s Rs 476 crore offer has introduced a new twist in the resolution of BMMCPL’s debt. Lenders and stakeholders are awaiting the court’s decision later this month, which will determine the fate of the settlement and the future of SOBO Central Mall.
