Kishore Biyani’s ₹476 Crore Offer for SOBO Central Mall

Kishore Biyani, the founder of Future Group, has made an unexpected proposal of ₹476 crore to lenders led by Canara Bank. This offer is intended for a one-time settlement (OTS) of the ₹571 crore debt of Bansi Mall Management Co (BMMCPL), the owner of SOBO Central Mall located in Mumbai’s Haji Ali area.

Details of the Offer

Kishore Biyani’s proposal of ₹476 crore comes a few days after creditors had approved a ₹475 crore bid from Runwal Group for the asset through an auction process.

Earlier in March 2024, lenders, led by Canara Bank, commenced Sarfaesi proceedings and obtained a bid of ₹475 crore to take over the SOBO Central Mall. However, in the last week, the founder of the Future Group reached out to the Debts Recovery Tribunal (DRT), contesting the lenders’ decision and offering to settle the debt himself.

As per the reports, Kishore Biyani has been in touch with lenders but has become more active after lenders accepted this bid from Runwal. He has put forward his proposal to beat the Runwal bid and has approached the court for the same. Lenders are now waiting for the court’s decision, which is scheduled for later in March.

It is reported that lenders led by Canara Bank have already got ₹47.5 crore or 10% of the bid amount from Runwal Group in the last week. But currently, the plea by Biyani in the DRT has delayed that process.

SOBO Central Mall was inaugurated in 1999 and currently has only one tenant, a McDonald’s joint. It is the oldest mall in Mumbai, and it has a total leasable area of 1,50,000 square feet.

Canara Bank and Punjab National Bank (PNB) are the two main charge holders in the account, as they are direct lenders to the company. Canara Bank is the main lender with ₹131 crore of loans outstanding, while PNB has dues of ₹90 crore. In addition, PNB, along with Union Bank of India, also has a secondary charge over the company’s assets because they had together lent ₹350 crore to a group company, Future Brands, with lease rental discounting of Bansi Mall Management Co as collateral.

Lenders expect the potential for redevelopment of the four-storey commercial building could attract real estate investors and help banks recover.

Banks have incurred losses of over ₹33,000 crore to the Future Group, with flagship Future Retail liquidating and Future Enterprises undergoing a second resolution process after the initial one failed to secure a buyer. A successful recovery from this initiative could represent a rare occurrence for lenders associated with the Biyani-led Future Group.

The share price of Future Retail Limited opened at ₹2.25 on March 19, 2024 on the NSE.

About Future Group

Future Group is an Indian conglomerate that is in various sectors, including retail and fashion. Future Retail Limited (FRL) is the flagship company of the Group that is primarily involved in the retailing of consumer, fashion and household products.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.