Kishore Biyani has made a surprise Rs 476-crore offer to lenders led by Canara Bank for a one-time settlement (OTS) of the Rs 571 crore debt of Bansi Mall Management Co (BMMCPL), which owns SOBO Central Mall in Mumbai‘s Haji Ali area. The Biyani offer comes just days after creditors had approved a Rs 475-crore bid from Runwal Group for the asset through an auction process, multiple people familiar with the development said.
Lenders led by Canara Bank initiated Sarfaesi proceedings and received a bid of Rs 475 crore to take over the mall earlier this month, but last week Biyani approached the debts recovery tribunal (DRT) challenging the lenders’ decision offering to settle the debt himself, these people said.
“Biyani has been in touch with lenders but has become more active after this bid from Runwal was accepted by lenders. He has offered to now beat the Runwal bid and approached the court for the same. Lenders are now waiting for what the court says in a hearing slated for later this month,” said a person familiar with the offer.
To be sure, lenders have already received Rs 47.5 crore or 10% of the bid amount from Runwal last week. But Biyani’s plea in the DRT has delayed that process. The Runwal Group declined to comment.
SOBO Central mall has no tenants except a McDonald’s joint which was launched when it was inaugurated in 1999. It is Mumbai’s oldest mall with a total leasable area of 150,000 square feet. But the emergence of new shopping places within the city and in the suburbs followed by the Covid shock meant that it never recovered from the slump. To add to it all, almost all its real estate was given out to Future Group companies which themselves were under stress.
Canara Bank and Punjab National Bank (PNB) are the two primary charge holders in the account as they are direct lenders to the company. Canara Bank is the lead lender with Rs 131 crore of loans outstanding, while PNB has primary dues of Rs 90 crore.
PNB, along with Union Bank of India, also has a secondary charge over the company’s assets because they had together lent Rs 350 crore to a group company, Future Brands, with lease rental discounting of BMMCPL as collateral.
Lead lender Canara did not reply to an email seeking comment.
“Biyani’s bid is backed by a large real estate and retail developer which probably sees potential in the development of this commercial property in South Mumbai. Since lenders already have a serious bidder in the queue, Biyani will have to put some cash on the table before his offer is considered serious enough,” said a second person aware of the details.
Biyani did not respond to calls and messages on his phone.
Lenders are hoping that the redevelopment potential for the four-storey commercial building could attract real estate investors and help banks in recovery.
Banks have lost more than Rs 33,000 crore to the Future Group, as the flagship Future Retail went into liquidation while Future Enterprises is undergoing a second resolution process after the first one failed to get a buyer. If successful, this recovery could be a rare one for lenders from the Biyani-led Future Group.
