Bombay Dyeing to sell 22-acre land in Mumbai's Worli to Japan's Sumitomo for Rs 5,200 cr

Bombay Dyeing & Manufacturing Company Ltd on Wednesday said its Board of Directors approved the proposal to sell the land parcel of about 22 acres in Worli, Mumbai to a subsidiary of Japanese conglomerate Sumitomo for Rs 5,200 crore.

"Board of Directors of The Bombay Dyeing and Manufacturing Company Limited (BDMC) approved the proposal to sell the land parcel of about 22 acres (along with the associated FSI) in Worli, Mumbai to Goisu Realty Private Limited (a subsidiary of Sumitomo Realty & Development Company Limited) ("Buyer") in 2 phases, for a total consideration of about Rs 5,200 crore, subject to approval of its shareholders," said Wadia-owned Bombay Dyeing in a stock exchange filing.

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

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."

On completion of the proposed transaction, the company will be able to:

• Record a pre-tax profit in excess of Rs 4,300 crore on account of this transaction.
• Report a strong positive net worth.
• Extinguish all its borrowings thereby saving interest costs and releasing the charge on encumbered assets.
• Pay dividend in future.
• Have a strong Treasury balance to fund the future realty projects.
The Board of Directors of BDMC had charted out a Strategy in March 2022 to change the company’s trajectory which envisaged:
• Focusing on realty business for future growth and profitability.
• Accelerating sale of flats in Island City Center, Dadar [ICC].
• Monetising its land bank.
• Deleveraging the Company by retiring its borrowings and improving credit rating.
• Developing the unutilised land parcels of the Company.
• Exploring joint development opportunities.

"The Board has also, in-principle, approved the development of the unutilised land parcels available with the company having a potential to create about 3.5 Million Square feet of residential / commercial property and generate a revenue of about Rs 15,000 crore over the next few years. The development will be planned judiciously in phases to manage Company’s cashflows efficiently. The Company will also evaluate other joint development and partnership opportunities to create a steady pipeline of future revenue and profits," said Bombay Dyeing.

On Wednesday, Bombay Dyeing's scrip on BSE closed 7% higher at Rs 140.5.

Last month, the Mumbai-based company reported a consolidated net loss of Rs 120 crore for the June quarter, higher than Rs 77 crore a year earlier.

The Wadia group has been facing troubles after its Go First airlines filed for bankruptcy in May, blaming "faulty" Pratt & Whitney engines for the grounding of about half its fleet.