Edelweiss ARC salvages Kohinoor project in Mumbai

In the city's real estate market which is riddled with incomplete projects, Edelweiss Asset Reconstruction Company is reviving the prestigious Kohinoor Square, a residential-cum-commercial development at Dadar. The project has been mired in litigations and construction was stalled in 2012.

The building, erstwhile Kohinoor mills, was bought by the Kohinoor group (promoted by Unmesh Joshi, son of former Maharashtra chief minister Manohar Joshi), Maharashtra Navnirman Sena chief Raj Thackeray and his business partner Rajan Shirodkar for Rs 421 crore. Thackeray exited the partnership in 2009. Kohinoor CTNL Infrastructure Private Ltd, a subsidiary of Kohinoor group, began construction of the premium residential and commercial establishment in 2009.

This is one of the rare instances where an asset reconstruction company (ARC) has taken over the debt from a clutch of banks and financial institutions to revive an incomplete real estate project. Besides taking over the Rs 1,000 crore debt, the ARC has also provided priority finance to complete the project.

In the next few months, the occupation certificates (OCs) for part of the commercial tower of the project are expected to be handed out. Few lenders like Bank of Baroda and IL&FS own some units in the commercial premise in lieu of unpaid loans.

"First, we bought the debt from various banks. After aggregating the debt, we infused additional finance of Rs 300 crore and another Rs 175 crore to complete the project. In the next few months, a part of the commercial tower of the building will be getting the occupational certificates to be handed over to the investors," said a source at Edelweiss ARC.

The initial plan was to build a five-star hotel, the largest in Asia. But later on, the plan was revised to have two towers of 52 floors and 32 floors which will have both commercial and residential space. The construction was on schedule but litigation over the floor space index (FSI) in 2012 slowed down the project.

The Rs 2,000 crore Kohinoor project is being completed by Sandeep Shirke And Associates (SSA), a Prabhadevi-based architectural firm. Manohar Joshi's son Unmesh, who initially owned the Kohinoor Square, lost control of the property which was one of the most ambitious real estate projects in Mumbai to SSA.

Edelweiss Asset Reconstruction company moved the National Company Law Tribunal after Kohinoor group failed to repay a mounting debt of Rs 1,000 crore in 2017. The NCLT court allowed SSA to take over the project after the resolution professional S V Ramkumar proposed the architect's name.

IN PROGRESS

• In the next few months, OCs for part of the commercial tower of the project are expected to be handed out
   
• Few lenders like BoB and IL&FS own some units in the commercial premise in lieu of unpaid loans