Prestige Estates Projects has bought out DB Realty’s stake in two ventures that are engaged in real estate projects in Mumbai, for ₹1,176.5 crore.
The Bengaluru-based real estate developer’s wholly owned subsidiary Prestige Falcon Realty Ventures has raised its stake in Prestige BKC Realtors to 100 per cent from 50 per cent by acquiring securities from DB Realty and its subsidiaries for ₹978.7 crore.
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In 2020, Prestige Falcon acquired stake in DB (BKC) Realtors by buying out holdings of entities such as IIRF XI Holdings and from Vistra ITCL. The entity was subsequently renamed Prestige (BKC) Realtors and it is engaged in building commercial projects in the Bandra Kurla area of Mumbai.
Prestige Estates has also bought out DB Realty’s stake in Turf Estate Joint Venture for ₹197.8 crore. In 2021, Prestige Falcon Realty Ventures invested in Turf Estate Joint Venture as a new partner with an equal share of profit and losses with DB Realty. The company is developing mixed-use projects in Mahalakshmi suburb of Mumbai, covering an area of 2.6 million square feet comprising of two office towers along with retail.
“These are strategic assets and Prestige Group intends to consolidate the stake in these key locations. We believe, this also creates long term value and enhances our annuity rental portfolio,” Chief Executive Officer Venkata K Narayana said, in response to an email from businessline seeking the rationale for the stake buy.
Among real estate circles there have been strong rumors that the progress on the two projects has been slow due to DB Realty’s financial constraints. Earlier this year during a chat with businessline on this issue, Narayana had refuted the allegations and said that the projects were on track.
DB Realty, in which Rekha Jhunjhunwala, wife of the late investor Rakesh Jhunjhunwala, held about 1.4 per cent stake as on March-end, did not respond to a query sent to its investor relations email ID. There was also no response to calls made to its office.
In the notes to the accounts of the results for the December quarter the company stated that it has debt obligations worth over ₹1,000 crore in the next 12 months. It added that the obligations were “higher than the current assets which are liquid in nature.” This could result in significant uncertainty on its ability to meet these debt obligations and continue as going concern. It said the management was addressing this issue “robustly” and has entered into one time settlement with various lenders, raised funds through issued convertible warrants, entered into development agreements and joint ventures to revive various projects with “significantly high growth potential”.
In a more recent filing in April the company stated that it had not defaulted on any outstanding dues to its lenders and pegged its total debt at ₹976.54 crore.