Birla sells prime real estate in Alipore

The S K Birla group is likely to sell some of its prime real estate in Kolkata and Mumbai under Birla VXL Ltd to repay a portion of the inter corporate deposits of the outfit.

A committee of the lenders of Birla VXL would monitor the sale of the properties.

Sources in the group said Birla VXL would carve out a separate division called investment division under the outfit, as part of the restructuring programme.

The non-core investments and assets of Birla VXL would be allocated to the division along with ICD loans of around Rs 50 crore (Rs 500 million).

Birla VXL currently has a debt liability of Rs 400 crore (Rs 4 billion).

The company had seven lenders at present, including the Asset Reconstruction Co of India Ltd, Bank of India, Union Bank, U Co Bank, Bank of Baroda and Punjab & Sind Bank.

The consortium of lenders of Birla VXL, led by Arcil, approved the restructuring last week.

A major portion of the debt would be realised through the sale of OCM division of Birla VXL, which has been hived off as a separate outfit called OCM India Ltd.

According to sources, Birla VXL was likely to dispose of the investments and real estate assets transferred to the investment division within a period of three years with the help of the monitoring committee.

The non-core assets of Birla VXL identified by the lenders included real estate held under Birla VXL and a part of the investment in other S K Birla group outfits held through Birla VXL.

Sources said the real estate assets of Birla VXL proposed to be transferred to the investment division were residential flats in Alipore, office premises on Cuffe Parade in Mumbai and a huge piece of land in Amritsar.

"Residential flats in Subham Apartments along with car parking facilities at 19 B Alipore Road are likely to be sold. Besides, prime office premises in Maker Towers, Backbay Reclamation in Cuffe Parade is also in the block.

"These are prime properties and likely to fetch a good price. The Amritsar land is of 24,288 sq metre along with buildings and structures at Chheharta," said sources.

The consideration realised on sale of these assets would be deposited in a no-lien account at a bank acceptable to the monitoring committee.

If the net consideration realized on sale of assets of the investment division is more than the ICD loans of Rs 50 crore, then the existing lenders would be entitled to share the surplus on pro rata basis among themselves.

However, if the net consideration realised on sale of assets of the investment division was less than the loans, then the unpaid portion of the loan would stand discharged.