IL&FS eyes to monetise its BKC headquarters by FY21-end

It is an NCLT-monitored process and will require approvals at every stage

IL&FS HQ, BKC, Bandra Kurla Complex, Mumbai, Maharashtra, IL&FS Financial Centre, Central Business District, Commercial capital, Carlyle Group, Avendus, Paypal, IBM, IDFC, CBRE South Asia, Gujarat, GIFT City, NCLT, National Company Law Tribunal

IL&FS will invite initial bids for selling its corporate headquarters at Bandra-Kurla Complex (BKC) in Mumbai, Maharashtra, later in September 2020. The company is looking to monetise its high-end office property by the end of FY21, and the deal is expected to fetch about Rs 1,500 crore.

IL&FS is in discussion with its advisors and will soon be commencing the public sale process for its BKC headquarters -- The IL&FS Financial Center (TIFC). While discussions about monetising the property in Mumbai’s new central business district have been on for some time, the company has now started the process with a definitive timeline in place.

It is an NCLT-monitored process and will require approvals at every stage. The company is expecting to attract bids by the end of October 2020. The iconic 10-storey property was one of the first structures to come up in BKC, which is the de facto Central Business District of the country’s commercial capital.

The office building with around 4.5 lakh sq ft of leasable area has IBM, IDFC, The Carlyle Group, Avendus and Paypal among its list of key tenants. Around 40% of the building is occupied by offices of IL&FS Group companies and these are expected to be vacated in due course as the deal reaches closure.

The company has roped in international property consultant CBRE South Asia as advisor for the proposed transaction. It has also put two 28-storey commercial towers in Gujarat's Gift City on the block. The government-appointed board of IL&FS is monetising the assets with an objective to manage its debt obligations.

With regards to Gift City, the sale process for pre-leased office spaces in Gift-1 and -2 has been initiated and expression of interest is expected by October 2020. Subsequently, the sale process for the remaining office spaces in Gift City will commence.

The distribution of all sale proceeds will be done in accordance with the NCLT-approved resolution framework.

The company plans to recover Rs 50,500 crore of loans, or about half of the Rs one lakh crore total dues, by March 2021. It plans to recover Rs 900 crore by the sale of real estate assets by March 2021 and a further Rs 1,200 crore through more such sales beyond that date.

The headquarters building itself is mortgaged with HDFC for loans outstanding of Rs 400 crore and the sale proceeds will also be used to pay off those debts.

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