Infrastructure lender IL&FS is seeking fresh approval from the Mumbai Metropolitan Region Development Authority (MMRDA) to sell its 10-storey headquarters in Bandra-Kurla Complex, Mumbai to Brookfield Asset Management. The MMRDA had approved subletting but the National Company Law Tribunal has approved an outright sale. IL&FS argues the MMRDA approval differs from what was sought as IL&FS wanted a sale approval. Brookfield says the deal is at an advanced stage with key approvals received and a substantial amount already paid. IL&FS is selling assets to manage debt obligations following its default in September 2018 while Brookfield is seeking to expand its presence in BKC.
Infrastructure lender IL&FS is seeking fresh approval from the Mumbai Metropolitan Region Development Authority (MMRDA) to transfer ownership of its iconic 10-storey headquarters in Mumbai's Bandra-Kurla Complex (BKC) business district to Brookfield Asset Management.
The MMRDA recently approved sub-leasing The IL&FS Financial Center (TIFC), based on an application from IL&FS. However, the National Company Law Tribunal (NCLT) has approved the outright sale of the property.
According to an IL&FS spokesperson, the approval granted by MMRDA is in variance with the approval that was sought for assignment or sale of TIFC basis the NCLT order. However, a senior MMRDA official said that the approval provided so far is as per IL&FS' application. A revised approval will be granted after reviewing it under the land disposal policy.
According to Brookfield, the assignment and transfer of the property is in "very advanced stages" with several approvals received, including the clearance from the NCLT.
In March 2022, Brookfield affiliate Chronos Properties signed a deal and paid a significant portion of the purchase consideration to conclude the transaction as per agreed terms. The deal is expected to close soon, a Brookfield spokesperson added.
Chronos Properties emerged as the winning bidder to acquire the landmark property for over INR 1,080 crore. IL&FS has already received 10% of the total amount. The deal is part of resolutions that the government-appointed board had filed with the NCLT under the Insolvency and Bankruptcy Code (IBC), 2016, to resolve IL&FS' total debt of over INR 99,000 crore as of October 2018.
IL&FS is selling assets to manage debt obligations following its default in September 2018 that triggered a liquidity crisis in the non-banking finance sector. The government replaced IL&FS' board to clean up its financial position.
The iconic 4.5-lakh square foot property was one of BKC's first structures, which is now the de-facto Central Business District of Mumbai, India's commercial capital.
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 that they bought from the Essar Group.
Brookfield has over 51 million sq ft of commercial space across six key Indian cities and also owns The Leela Hotels and Palaces. Overall, Brookfield Asset Management has over $25 billion of assets under management across real estate, infrastructure, renewables, and private equity in India.
For IL&FS, it is a key step in the resolution of its massive debt through asset monetization, as it continues to resolve its financial obligations. The conclusion of this high-profile deal will be closely watched as an indicator of progress in India's insolvency resolution process.
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