Lenders to Bansi Mall Management Co Pvt Ltd, the owner of SOBO Central Mall in Mumbai's Haji Ali area, have initiated Sarfaesi proceedings to recover Rs 571 crore in dues. Canara Bank and Punjab National Bank (PNB) are the primary charge holders. PNB, along with Union Bank of India, also has a secondary charge over the company's assets. While the current valuation of the property is Rs 400 crore, there is potential for redevelopment and sale for over Rs 1,000 crore, offering hope for recovery amidst Future Group's financial struggles. Crisil had previously downgraded BMMCPL's credit rating due to weak liquidity.
Lenders are taking steps to recover dues from Bansi Mall Management Co Pvt Ltd (BMMCPL), the owner of SOBO Central Mall in Mumbai's Haji Ali area, amid ongoing financial challenges faced by Kishore Biyani's Future Group. BMMCPL owes lenders a total of Rs 571 crore, with Canara Bank and Punjab National Bank (PNB) being the primary charge holders. Canara Bank leads with Rs 131 crore in outstanding loans, while PNB has primary dues of Rs 90 crore. Additionally, PNB, along with Union Bank of India, holds a secondary charge on the company's assets due to their lending of Rs 350 crore to a group company, Future Brands, with lease rental discounting of BMMCPL as collateral.
Recovery efforts are underway, with the lead lender, Canara Bank, yet to decide whether to seek a buyer through an auction or sell the loan to a reconstruction company for cash. However, bankers remain optimistic about the recovery potential from this account. The property in question is a four-storey commercial building in a prime Mumbai location with redevelopment potential. Experts suggest that if the right buyer is found, the property could be redeveloped and sold for over Rs 1,000 crore, offering a rare recovery opportunity for lenders dealing with the Future Group.
While the property's latest valuation by Canara Bank stands at Rs 400 crore, down from Rs 600 crore when the loan was issued, its value has diminished due to a lack of tenants. SOBO Central Mall, Mumbai's oldest mall, spanning 150,000 square feet, has struggled to regain traction, facing competition from new shopping destinations and the impact of the COVID-19 pandemic. Furthermore, most of its real estate was leased to Future Group companies, which were themselves under financial stress.
A recent report from ratings firm Crisil highlighted BMMCPL's non-cooperation and rated its Rs 250 crore bank loan facilities as 'D,' indicating a default category. In June 2021, Crisil downgraded BMMCPL from 'B-' to 'C,' signifying a very high risk of default. The report emphasized the company's weak liquidity position and its dependence on group support for repayments, which commenced from March 2022. The credit risk profile of the Future Group, exacerbated by the pandemic, further affected BMMCPL's credit risk profile.
Lenders are pinning their hopes on the prime real estate's redevelopment potential, aiming to recover some dues from companies associated with Kishore Biyani. This effort comes as lenders face significant challenges in recovering nearly Rs 32,000 crore in dues from Future Retail and Future Enterprises, the flagship entities of the Future Group.
In summary, lenders are pursuing Sarfaesi proceedings to recover Rs 571 crore in dues from BMMCPL, the owner of SOBO Central Mall, with hopes of leveraging the property's redevelopment potential. This recovery effort provides a glimmer of hope amidst ongoing financial challenges within the Future Group, though significant obstacles remain in recouping dues from the group's flagship entities.
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