Banks settle Rs 7.37 bn loan on South Mumbai mall with BMMCL promoters
ECONOMY & POLICY

Banks settle Rs 7.37 bn loan on South Mumbai mall with BMMCL promoters

Canara Bank-led lenders have given their approval to the one-time settlement offer proposed by Kishore Biyani for the debt owed by the holding company of SOBO Central Mall (formerly known as Crossroads) at Haji Ali in south Mumbai.

Bansi Mall Management Company (BMMCL), which is promoted by Biyani, had a debt of Rs 7.37 billion with lenders. The promoters offered Rs 4.40 billion to settle the debt.

The settlement represents a 40% reduction for the lenders. The offer was approved at a joint lender meeting last month, as there were no bids for the mall during an auction in January 2024, where the reserve price was set at Rs 4.75 billion. Initially, lenders valued the mall at Rs 6 billion when sanctioning the loans. However, due to the property's disuse, the internal valuation was marked down to Rs 4 billion. Although the company's contractual liability is Rs 7.37 billion, the book liability of the banks holding the first charge (Canara Bank and Punjab National Bank) is Rs 2.2 billion. The additional liability of Rs 5.75 billion arises from a second charge held by United Bank of India and PNB against which the property was offered as security.

Canara Bank and Biyani did not respond to queries for comment. The proposal was tentatively accepted by the banks at the joint lenders' meeting. The completion of some formalities by the borrower, including paying 10% upfront and the remaining amount before the third week of March, is required for the deal to be finalised.

BMMCL was incorporated in 2005 by the promoters of the Future group to develop and manage the mall. SOBO Central Mall, with a total leasable area of 148,198 sq ft, was rented out to Biyani's group companies, including Future Consumer Enterprises, Future Retail, and Future Lifestyle. Future Consumer Enterprises occupied only 1% of the leasable area.

BMMCL defaulted on its obligations after the cessation of rental income during the Covid lockdown. Rent recoveries were weak due to the distressed state of Future companies renting the premises. The lack of cash flows severely impacted the company's financials, leading to continuous defaults. This situation prompted lenders to initiate proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

Crossroads, the first mall in the country set up by the Ashok Piramal group, faced challenges in managing customer traffic when it was launched in 1999. In response, the management briefly restricted free entry to those with a credit card or a mobile phone ? both rare items in those days. Others without these items had to pay a Rs 60 entry fee. However, a downturn in retail resulted in the promoters exiting the mall management business.

Canara Bank-led lenders have given their approval to the one-time settlement offer proposed by Kishore Biyani for the debt owed by the holding company of SOBO Central Mall (formerly known as Crossroads) at Haji Ali in south Mumbai. Bansi Mall Management Company (BMMCL), which is promoted by Biyani, had a debt of Rs 7.37 billion with lenders. The promoters offered Rs 4.40 billion to settle the debt. The settlement represents a 40% reduction for the lenders. The offer was approved at a joint lender meeting last month, as there were no bids for the mall during an auction in January 2024, where the reserve price was set at Rs 4.75 billion. Initially, lenders valued the mall at Rs 6 billion when sanctioning the loans. However, due to the property's disuse, the internal valuation was marked down to Rs 4 billion. Although the company's contractual liability is Rs 7.37 billion, the book liability of the banks holding the first charge (Canara Bank and Punjab National Bank) is Rs 2.2 billion. The additional liability of Rs 5.75 billion arises from a second charge held by United Bank of India and PNB against which the property was offered as security. Canara Bank and Biyani did not respond to queries for comment. The proposal was tentatively accepted by the banks at the joint lenders' meeting. The completion of some formalities by the borrower, including paying 10% upfront and the remaining amount before the third week of March, is required for the deal to be finalised. BMMCL was incorporated in 2005 by the promoters of the Future group to develop and manage the mall. SOBO Central Mall, with a total leasable area of 148,198 sq ft, was rented out to Biyani's group companies, including Future Consumer Enterprises, Future Retail, and Future Lifestyle. Future Consumer Enterprises occupied only 1% of the leasable area. BMMCL defaulted on its obligations after the cessation of rental income during the Covid lockdown. Rent recoveries were weak due to the distressed state of Future companies renting the premises. The lack of cash flows severely impacted the company's financials, leading to continuous defaults. This situation prompted lenders to initiate proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Crossroads, the first mall in the country set up by the Ashok Piramal group, faced challenges in managing customer traffic when it was launched in 1999. In response, the management briefly restricted free entry to those with a credit card or a mobile phone ? both rare items in those days. Others without these items had to pay a Rs 60 entry fee. However, a downturn in retail resulted in the promoters exiting the mall management business.

Next Story
Infrastructure Urban

India To Invest $37 Billion To Boost Petrochemical Capacity

India is set to become a major global player in the petrochemicals industry, driven by a planned capital expenditure of $37 billion (Rs 3.1 trillion) aimed at reducing import dependency and enhancing self-sufficiency, according to S&P Global Ratings.In its latest report titled “First China, Now India: Self-Sufficiency Goals Will Add To Petrochemicals Supply”, S&P said India’s large-scale capacity expansion—mirroring China’s earlier push—will likely intensify oversupply pressures in Asia’s petrochemical markets.Currently the world’s third-largest petrochemical consumer a..

Next Story
Infrastructure Transport

Indian Railways Expands Global Exports Of Rail Equipment

Indian Railways has announced that it is rapidly emerging as a global exporter of railway equipment, including bogies, coaches, locomotives, and propulsion systems, under the government’s ‘Make in India, Make for the World’ initiative.According to an official statement, India’s railway products are now reaching over 16 international markets, reflecting the country’s growing capacity to design, develop, and deliver world-class rail solutions.Metro coaches have been exported to Australia and Canada; bogies to the United Kingdom, Saudi Arabia, France, and Australia; propulsion systems t..

Next Story
Infrastructure Transport

RailTel Awards Rs 163 Million Contract To RTNS Technology

RailTel Corporation of India Limited (RailTel), a Mini Ratna Public Sector Undertaking, has awarded a domestic work order worth Rs 163 million to RTNS Technology Private Limited.The contract, issued on 30 September 2025, involves the supply and installation of equipment and related services for one of RailTel’s key customers. The project underscores RailTel’s commitment to advancing technology and communication infrastructure through collaboration with domestic system integrators.RTNS Technology Private Limited, an ISO-certified system integrator, provides comprehensive solutions for perim..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?