Brookfield Asset Management, a global alternative investment major, successfully won the bid and is ready to acquire infrastructure lender Infrastructure Leasing & Financial Services Limited’s (IL&FS’) headquarters in Bandra-Kurla Complex (BKC) for more than Rs 1,080 crore.
The company told the media that the agreement is part of resolutions that the government-appointed board led by Uday Kotak has submitted with the dedicated bankruptcy court National Institution Law Tribunal (NCLT) or that have gained judicial authorisation. IL&FS already got 10% of the total consideration, and the deal is likely to be completed in the next financial year (FY). The property was one of the first establishments to emerge in BKC, which is now the de facto Central Business District of the country’s commercial capital. The high-end office building with nearly 4.5 lakh sq ft of the leasable area includes key tenants such as IBM, IDFC, The Carlyle Group, Avendus, and Paypal. The top three floors of the building are occupied by IL&FS Group companies and are likely to be vacated as the deal closes. Brookfield has 47 million sq ft of office across six cities, and also owns The Leela Hotels and Palaces. Overall, Brookfield Asset Management has more than $20 billion of assets under management across infrastructure, renewables and private equity in India. It already has a huge presence in BKC via its assets in the Godrej building, previously owned by Jet, and it also owns the Equinox Business Park, which they bought from Essar. To manage debt commitments, IL&FS is monetising its assets. In September 2018, IL&FS' inability to meet repayment commitments flared a liquidity crunch in India's non-banking finance industry. The government then overhauled the IL&FS board as part of a clean-up effort, and the company has since been working to address a total debt of over Rs 99,000 crore as of October 2018. The new board and management of IL&FS stated that it addressed debt of Rs 55,000 crore to date, up from Rs 52,200 crore as of November 2021, as part of a periodic update on the ongoing IL&FS resolution. As of October 2018, the group's overall resolution estimate was Rs 61,000 crore, representing 62% of the fund-based and non-fund-based debt of over Rs 99,000 crore. So far, The debts that have been resolved Rs 55,000 crore account for more than 90% of the total expected settlement value. The remaining Rs 6,000 crore debt will be resolved in FY23. The estimated overall resolution of 62% is double the average recovery of 31% under Insolvency and Bankruptcy Code (IBC). As of October 2018, 246 of the 347 organisations within the IL&FS Group had been resolved, leaving 101 entities to be addressed in the coming financial year. Image Source
