Kishore Biyani’s Debt Settlement (Image Source: IANS)
Prominent Indian businessman Kishore Biyani, the founder of Future Group, has reached a noteworthy settlement with lenders of Bansi Mall Management Company, resolving dues amounting to Rs 571 crore. This significant development underscores a remarkable recovery of 83 per cent for the creditors, with Biyani making a substantial one-time payment of Rs 476 crore.
According to The Economic Times report, the settlement was facilitated by real estate developer K Raheja Corp., which acquired SOBO Central Mall, formerly known as Crossroads, located in south Mumbai’s Haji Ali locality. SOBO Central holds historical significance as India’s first mall, having opened its doors in the late 1990s.
This successful recovery stands out as a rare triumph for banks, which have encountered challenges with loan write-offs and losses in various instances. Led by Canara Bank, creditors had initiated proceedings to recover their dues by auctioning the property, receiving a bid worth Rs 475 crore. However, Biyani presented a counteroffer to settle the outstanding amount at Rs 476 crore, which was accepted by the lenders.
K Raheja Corp. Real Estate, a subsidiary of K Raheja Corp., has acquired SOBO Central Mall with a leasable area of nearly 150,000 square feet. The transaction, completed on Monday, involved the payment of stamp duty amounting to Rs 28.56 crore.
SOBO Central Mall, currently devoid of tenants apart from a McDonald’s outlet established during its inauguration in 1999, experienced a decline in footfall over the years due to the emergence of newer and larger retail properties in both urban and suburban areas.
The mall’s financial struggles were exacerbated by the COVID-19 pandemic, which severely impacted rental income and retail business operations. Furthermore, the majority of the mall’s retail space was leased to Future Group companies, which were grappling with their own financial challenges.
The financial default by Bansi Mall Management Company prompted creditors to initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Primary lenders in the loan account included Canara Bank and Punjab National Bank (PNB), with Canara Bank holding outstanding loans of Rs 131 crore and PNB with dues amounting to Rs 90 crore. Additionally, PNB, along with Union Bank of India, held a secondary charge over the company’s assets, stemming from their joint lending to a group entity, Future Brands.
