Revamping SOBO Central Mall: Kishore Biyani Bold Bid Challenges Runwal Group

Kishore Biyani

Kishore Biyani, the renowned entrepreneur, has extended a remarkable Rs 476-crore proposal to creditors, spearheaded by Canara Bank, for a one-time settlement (OTS) of Bansi Mall Management Co (BMMCPL)’s debt, amounting to Rs 571 crore.

This debt pertains to the ownership of SOBO Central Mall situated in Mumbai’s Haji Ali locale. The offer from Biyani emerges shortly after creditors greenlit a bid of Rs 475 crore from the Runwal Group for the same asset, following an auction process. Sources familiar with these developments reveal that lenders, led by Canara Bank, had initiated Sarfaesi proceedings, securing a bid of Rs 475 crore to acquire the mall earlier in the month.

However, Biyani’s recent move involves challenging the lenders’ decision by presenting a compelling offer to settle the debt directly, as conveyed by these sources.

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Kishore Biyani Strategic Maneuver: Paving the Way for Mall Redemption

Kishore Biyani

Kishore Biyani, previously engaged with lenders, has intensified his efforts following the acceptance of Runwal’s bid. He now aims to outshine the Runwal offer and has approached the court with this objective in mind.

A reliable source familiar with the situation disclosed, “Biyani’s proactive stance became pronounced post the approval of Runwal’s bid. He is determined to surpass the existing bid and has initiated legal proceedings to support his claim.

The outcome of the upcoming court hearing later this month will significantly influence the direction of this saga.”

It’s worth noting that lenders have already received a partial payment of Rs 47.5 crore, equivalent to 10% of the bid amount, from Runwal last week. However, Biyani’s intervention through the Debt Recovery Tribunal (DRT) has momentarily stalled this process.

The Runwal Group has refrained from commenting on these recent developments.

Challenges and Opportunities: Charting a New Course for SOBO Central Mall

SOBO Central Mall, with its sole tenant being a McDonald’s outlet established during its inauguration in 1999, stands as Mumbai’s oldest mall, boasting a leasable area spanning 150,000 square feet. Despite its historical significance, the emergence of new shopping destinations within Mumbai and its suburbs, compounded by the impact of the Covid-19 pandemic, has hindered its revival. Additionally, the mall’s reliance on Future Group entities for leasing its real estate, further exacerbated by the group’s financial strain, has added to its predicament.

Navigating Financial Terrain: Canara Bank and PNB’s Integral Role

Canara Bank and Punjab National Bank (PNB) serve as the primary charge holders in this context, having extended direct loans to the company. Canara Bank, leading the consortium, holds outstanding loans amounting to Rs 131 crore, while PNB’s primary dues stand at Rs 90 crore.

Furthermore, PNB, alongside Union Bank of India, holds a secondary charge over the company’s assets, stemming from their collective loan disbursement of Rs 350 crore to a group company, Future Brands, with BMMCPL’s lease rental discounting serving as collateral.

Assessing Bid Viability: Biyani’s Prospects and Lenders’ Expectations

Analysts speculate that Biyani’s bid, backed by a prominent real estate and retail developer, underscores a strategic vision for the commercial property’s development in South Mumbai. However, with lenders already considering a substantial bid from Runwal Group, Biyani must demonstrate his commitment by presenting a competitive financial offer to garner serious consideration.

A source knowledgeable about the intricacies of the situation remarked, “Biyani’s bid necessitates a tangible financial commitment to be taken seriously by the lenders, who are currently evaluating their options.”

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Despite attempts to reach Biyani for comment, calls and messages to his phone remain unanswered. Lenders are cautiously optimistic about the potential for redevelopment of the four-storey commercial building, anticipating interest from real estate investors that could facilitate debt recovery.

A Glimmer of Hope Amidst Financial Uncertainty

In the wake of substantial losses incurred by banks due to the Future Group’s financial turmoil, Biyani’s bid for the redemption of SOBO Central Mall presents a rare opportunity for lenders to recoup losses. As the fate of this bid unfolds, stakeholders remain watchful, hoping for a favorable outcome that could pave the way for a much-needed financial turnaround amidst the challenging economic landscape.

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