Mumbai: Lenders approve Rs 490 crore bid for Jet Airways’ BKC office – ET RealEstate

MUMBAI: Lenders have approved a Rs 490-crore bid by Vrihis Properties—a Brookfield company—for two floors of office space owned by the now bankrupt Jet Airways in Bandra-Kurla Complex.

As the sole bidder, the Canada-based private equity fund had bid at the reserve price and did not face competition, banking sources said.

At that price, the 1.7 lakh sq ft office space in Godrej BKC Building works out to Rs 29,000/sq ft.

Bankers said it was a good price given the market conditions and uncertainty over real estate prices. Its sale was delayed as although lenders had initiated bankruptcy proceedings, the floors were mortgaged to HDFC.

Jet bid Rs 826 crore for plot in 2008

Bankers are unlikely to get the sale’s proceeds. Bulk of funds will go to HDFC and a small amount will clear airline debts from US Exim Bank.
Mumbai: Lenders approve Rs 490 crore bid for Jet Airways' BKC officeJet Airways, which shut down last year, had bid Rs 826 crore during an MMRDA auction to develop the BKC plot in 2008. The cash-strapped airline later tied up with Godrej Properties in 2011 to jointly develop the plot. In 2015, drug-maker Abbott India bought 4.35 lakh sq ft space in the building for Rs 1,479 crore. HDFC said the property was mortgaged to it by Jet.

A report by real estate consultancy firm JLL said workplace design will see a shift over time due to Covid-19 with a mixed response from occupants. While telecommuting will become more mainstream, leading firms worldwide will embrace flexible workplace arrangements and take steps for social distancing and good hygiene, it said.

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Mumbai-based Vrihis Properties to take over Jet Airways’ BKC office – ET RealEstate

MUMBAI: City-based Vrihis Properties has emerged as a successful bidder for the Jet Airways‘ Bandra Kurla Complex-situated premises and the company has “decided” to accept its offer at Rs 490 crore, now-defunct Jet Airways said in a regulatory filing on Saturday.

The Jet Airways RP had issued a public notice on June 13 for the sale or transfer of third and fourth floors of the company’s building in “Jet Airways Godrej BKC“, by way of public auction at a reserve price of Rs 490 core.

“Pursuant to the e-public auction held on June 26, 2020, Vrihis Properties Private Limited has emerged as the successful bidder. The company has decided to accept the offer of the successful bidder for the transfer of the immovable property, at a price of Rs 490 crore.

“The proceeds from the sale will be utilised as per the directions of the NCLT, Delhi,” Jet Airways’ Resolution Professional said in the filing.

The successful bidder is not a part of the promoter group of the company or a group company and the proposed transaction will not qualify as a related-party transaction, the company said.

The insolvency professional had sought permission of the NCLT for the sale of the premises after a resolution was passed at the 10th committee of creditors (CoC) meeting held on April 24 with approval of 74.45 per cent votes.

The Principal Bench of the NCLT in its order on June 11 granted permission to the grounded airline to sell the premises for utilising the proceeds to settle Rs 360 crore dues of HDFC, as against the mortgage lender’s claim of Rs 424 crore.

The immovable property is not a core asset of the company and will not impact its prospects of reviving its aviation business, the RP said in the filing.

The cash-strapped airline, which was grounded in April 2019, owes more than Rs 8,000 crore to banks, with public sector lenders having significant exposure.

The National Company Law Tribunal (NCLT) Mumbai-bench had on June 20, 2019, admitted the insolvency petition filed by the lenders’ consortium led by State Bank of India against Jet Airways.

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Lenders put Jet Airways’ BKC office on the block at reserved price of Rs 490 crore – ET RealEstate

MUMBAI: The dedicated bankruptcy court has allowed lenders of defunct carrier Jet Airways to sell its office assets located in BKC, a prime commercial suburb of Mumbai.

On June 11, the Principal Bench of the National Company Law Tribunal (NCLT) allowed the lenders to go ahead with the monetization plan for about 1.70 lakh square feet saleable area that comprises of 3rd and 4th floor of building ‘Jet Airways Godrej BKC’. The asset also includes rights to use parking space for about 140 cars.

The lenders have kept the reserved price of Rs 490 crore for the property and the auction for the same is expected to take place on June 26.

“The proceeds from the proposed sale of premises will be utilized for the clearing residual dues remained payable to one Export-Import Bank of the United States over the finance lease created on six aircraft of corporate debtor (Jet Airways) and to HDFC over the security interest created in favour of it,” said the six-page order.

According to the order, US Exim holds a charge over six aircraft of which cumulative depreciated value is over $200 million. “If the amount payable to US Exim is not paid, US Exim will become entitled to repossess the six aircraft,” said the order further adding that the US Exim bank has agreed that upon the payment of $13 million (about Rs 90 crore), it will transfer the title of six aircraft to the corporate debtor.”

With this development, Jet Airways can add six aircraft in its fleet worth around Rs 1,400 crore, which will help its prospects for better bidders, people aware of the development said.

As per the bid document, the interested parties will have to submit earnest money of Rs 25 crore by June 24 along with the bid documents. The lenders had approved the sale of this premise with 74.45% voting.

“The steps taken by the CoC appears to be a workable solution in the absence of any provisions on cross border insolvency to get the charge on aircraft released from US Bank,” said Ashish Pyasi Associate Partner Dhir & Dhir Associates. “The proposed auction of one of the immovable properties of Jet Airways is unparalleled because the proceeds of this auction will be used for clearing the dues of HDFC Bank the charge on immovable property and Export-Import Bank of US so that the charge of US bank on the aircraft will be released.”

The Resolution Professional (RP) has received claims of about Rs 37,000 crore, less than a third of which came from financial creditors.

“This was planned for the value maximisation and benefit of all the stakeholders,” said Ashish Chhawchharia, the head of Grant Thornton India’s restructuring practice and the RP for Jet Airways.

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