Will sell 4.5 lakh sq feet, or one-ninth of what it can, to be debt-free
MUMBAI: Bombay Dyeing and Manufacturing Ltd, is expecting to rake in Rs 900 crore by next year by selling a small part of the 8 lakh square feet commercial property it is developing in Dadar and Worli in central Mumbai, chairman Nusli Wadia said Tuesday.
That is a change from the company’s initial plan to lease out the entire 4 million square feet that it is developing. Selling one-ninth of that will make the company debt-free, Wadia said.
“In the first phase of development, 450,000 square feet of commercial property will be sold next year. This will bring in Rs 900 crore, which will make us debt free and resolve a lot of issues,” Wadia said, while addressing shareholders at the company’s annual general meeting.
Debt was run up as Bombay Dyeing’s Worli textile plant was closed and operations shifted to Ranjangaon near Pune, where it has a capacity to produce 40 lakh metres.
Wadia told company’s shareholders there were no plans to spin off the real estate division.
While the state government’s policy of giving an floor space index 2.6 for land development where 50% of the space would be for information technology has come as a boon for companies such as Godrej Properties, Century Mills and Bombay Dyeing.
The decision by the state to allow 80% development to be commercial will bring in better revenues to these companies.
“We see an opportunity to encash on the change in policy. Work has commenced on the high rises and we stand to benefit. These profits will reduce our borrowings. The market has changed and interest rates have risen so it is better to become debt-free than to lease out the property.” said Wadia.
At its Spring Tower property in Dadar, 80% of the residential apartments have already been sold.
The textile division of the Rs 1,100 crore Bombay Dyeing hasn’t been performing well and the polyester stable fibre division is running into losses.
Company officials blame the latter’s performance on the industry dynamics and inflation.
s_tanvi@dnaindia.net
