IL&FS’ headquarters in Mumbai’s BKC sold to Brookfield for Rs 1,080 crore

March 30, 2022
 Representative Image
Representative Image

Global alternative investment major Brookfield Asset Management has emerged as the successful bidder and is set to acquire infrastructure lender IL&FS’ headquarters, a 10-storey iconic property in Mumbai’s business district Bandra-Kurla Complex (BKC) for over Rs 1,080 crore.

The deal is part of resolutions that the Uday Kotak-led government-appointed board has filed with the dedicated bankruptcy court National Company Law Tribunal (NCLT) or have received judicial approvals, the crisis-hit non-banking finance company said earlier today.

IL&FS has already received 10% of the total consideration and the deal is expected to be concluded in the next financial year.

On March 17, ET was first to report that Brookfield Asset Management has emerged as the successful bidder to acquire the marquee property.

The iconic property was one of the first structures to come up in BKC, which is now the de facto Central Business District of the country’s commercial capital.

The high-end office building with around 4.5 lakh sq ft of leasable area counts IBM, IDFC, The Carlyle Group, Avendus and Paypal among its list of key tenants.

Top three floors of the building are occupied by offices of IL&FS Group companies and these are expected to be vacated in the due course as the deal reaches closure.

ET’s email query to Brookfield Asset Management and transaction advisor CBRE South Asia remained unanswered until the time of going to press.

Apart from Brookfield Asset Management several other global and domestic institutional investors had also shown initial interest in buying the asset.

Brookfield has 47 million sq ft of office space across 6 cities, and also owns The Leela Hotels and Palaces. Overall, Brookfield Asset Management has over $20 billion of assets under management across real estate, infrastructure, renewables and private equity in the country.

Brookfield already has a large presence in BKC through its assets in the Godrej building which used to be owned by Jet and it also owns the Equinox Business Park which they bought from Essar.

IL&FS is monetising its assets with an objective to manage debt obligations. The failure of IL&FS to meet repayment obligations in September 2018 had triggered a liquidity squeeze that gripped India’s non-banking finance sector. As part of a clean-up, the government then replaced the IL&FS board, which has since been engaged in trying to resolve total debt worth over Rs 99,000 crore as of October 2018.

As part of periodic update on the ongoing IL&FS resolution, the new board and management of IL&FS shared that it has addressed debt of Rs 55,000 crore till date, up from Rs 52,200 crore as of November 2021.

The group has retained its overall resolution estimate at Rs 61,000 crore, representing 62%, fund based and non-fund based, debt of over Rs 99,000 crore as of October 2018.

The debt addressed till date (Rs 55,000 crore) represents over 90% of the overall estimated resolution value. Resolution of remaining Rs 6,000 crore debt will move into FY23.

This overall resolution estimate of 62% is double the average recovery of 31% under IBC. Of the 347 entities under IL&FS Group as of October 2018, a total of 246 entities stand resolved leaving 101 entities to be resolved in the next financial year.

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