Worli land sale: Bombay Dyeing’s Rs 5,200 crore pact with Sumitomo

Today, the bulls on Dalal Street are experiencing a positive trend. Both the Sensex and Nifty are in the green, with gains of 0.16% and 0.11%, respectively.

In the optimistic market sentiment, the shares of Bombay Dyeing & Manufacturing Company Limited surged 9.01%. Furthermore, the script witnessed a massive spurt in volume by more than 7 times. The company’s current market capitalisation is Rs 3,169.28crore.

The Bombay Dyeing & Manufacturing Company is currently engaged in various businesses, including Real Estate Development, Polyester Staple Fibre, and Retail (Textiles).

Yesterday, the Board of Directors of The Bombay Dyeing and Manufacturing Company (BDMC) approved a proposal to sell approximately 22 acres of land in Worli, Mumbai, along with the associated Floor Space Index (FSI), to Goisu Realty Private Limited. Goisu Realty Private Limited is a subsidiary of Sumitomo Realty & Development Company Limited. This transaction will take place in two phases, with a total consideration of about Rs 5,200 crore, subject to approval by the company’s shareholders.

Upon approval by the shareholders, BDMC will receive approximately Rs 4,675 crore from the buyer for Phase-I of the transaction. The remaining amount of about Rs 525 crore will be received upon the completion of certain conditions by BDMC and the execution and consummation of the definitive agreements for Phase-II.

Commenting on the proposed transaction, Nusli Wadia, Chairman, said, “I am happy to inform that BDMC is entering into agreements with Sumitomo group for sale of about 22 acres of land (along with the associated FSI) in Worli, Mumbai for a total consideration of about Rs 5,200 crore.”

The sale is expected to have several positive impacts on the company, including:

• Reduced Debt: The sale will enable Bombay Dyeing to significantly reduce its current debt burden, which stands at Rs 3,969 crore. The proceeds from the sale will be used to pay down this debt.
• Improved Financial Health: The reduction in debt will enhance Bombay Dyeing’s financial stability, making it more appealing to investors and lenders.
• Increased Cash Flow: The sale proceeds will bolster Bombay Dyeing’s cash flow, providing the company with greater financial flexibility. This can be used to reinvest in its core businesses or explore opportunities in new sectors.

In conclusion, the sale of Bombay Dyeing’s land in Worli, Mumbai, represents a positive development for the company and its investors, as it not only reduces debt but also enhances financial strength and cash flow.

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.