Mumbai: Debt-laden Reliance Communications Ltd (RCom) is in advanced discussions to sign a development deal with Pune-based Panchshil Realty Ltd for its 125 acre land at Navi Mumbai, three people aware of the matter said.
In November 2017, the Anil Ambani-led company had invited potential bidders for outright purchase or co-development of the land housing Dhirubhai Ambani Knowledge City (DAKC). RCom is looking to monetise the asset as part of its larger debt restructuring plan to repay debt around Rs45,000 crore.
The telecom company had announced earlier that it expects to raise around Rs10,000 crore by developing DAKC land.
“RCom is in talks with Panchshil Realty to sign as a development manager for developing DAKC," said the first of the three persons mentioned above, all of whom spoke under condition of anonymity. The Blackstone-backed Panchshil may bring in another developer as a partner for the project, this person added.
In the first phase, around 10 million sq. ft will be developed with an information technology park and some retail components, the second of the three persons said, adding this may require an investment of around ₹ 3,500 crore and is expected to take up three to four years. Overall, the plot has a development potential of around 20 million sq. ft, of which only 1.8 million sq. ft has been developed so far.
Email queries sent to spokespersons of RCom and Panchshil were not answered till press time.
Apart from RCom headquarters, DAKC currently houses several office buildings and residential blocks, hospitals, helipads and a 250-room guest house.
Last year, RCom had hired property consultant JLL India as transaction advisor, which started a bidding process. A 23 November report by Economics Times said the property has received interest from several large real estate firms like RMZ Corp, Wadhwa Group and Raheja, and private equity firms like Brookfield and KKR. However, the Panchshil transaction is directly handled by RCom, and JLL is no longer involved in the process, said an official quoted above. JLL did not respond to an email seeking confirmation on the matter.
“The area around DAKC has been established as a commercial and IT hub. A little further, there is K Raheja’s IT park Mindspace. All these have also created a good employable population in the surrounding area including Thane, Kalyan-Dombivali area. The area is already in growth curve in terms of demand for both housing and commercial properties are concerned. And with the pick-up in demand for office space, there is newfound interest among developers to get into commercial real estate," said Pankaj Kapoor, managing director, Liases Foras, a real estate advisory firm.
Last year, RCom had announced that it has finalized a debt resolution plan that involves the sale of its assets. Through the plan, which involves selling of spectrum, fibre and tower network, equity injection by global strategic partners and development of real estate assets, it expects to reduce its debt by Rs39,000 crore at the end of October.
However, the National Company Law Tribunal (NCLT) on 8 March barred RCom from selling its telecom assets, following a petition filed by investor HSBC Daisy Investments. Separately, an arbitration tribunal had ruled in an interim order on 5 March that RCom and its units could not transfer or sell any assets without its permission after Swedish infrastructure provider Ericsson moved the tribunal to recover unpaid dues.
In filing to the BSE on 14 March, RCom has said that current court rulings would not impact sale of its real estate assets. “There is no stay for sale of spectrum, MCN (Media Convergence Nodes) and real estate of the company," it said.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.