Peninsula Land defaults on Rs 2.35 crore debt obligations

MUMBAI: The Ashok Piramal Group’s real estate development company Peninsula Land has defaulted on its loan obligations of Rs 2.35 crore to the State Bank of India. This includes principal of Rs 88 lakh and Rs 1.47 crore interests accrued thereon.

The company is known for developing India’s first mall Crossroads in South Mumbai and converting first mill land into a commercial complex Peninsula Corporate Park in Central Mumbai’s now business district Lower Parel.

Its total debt including short term and long term facilities stood at Rs 1,630.65 crore. Of this, State Bank of India’s secured term loan principal is Rs 177.72 crore with total tenure of 143 months at interest rates of 9.95% per annum, the company said in a regulatory filing while announcing the default.


Since 1997, the company has developed nearly 8 million sq ft in Mumbai. Apart from Mumbai, the company has projects in Pune, Nashik, Lonavala, Bangalore and Goa. Most of its projects came up on erstwhile textile mill lands and joint developments with landowners. The company also manages a real estate fund through one of its subsidiaries and has co-invested in five projects with the fund.

Earlier this week, the company has entered into a debt-asset swap arrangement with Housing Development Finance Corporation (HDFC) against encumbrance over its nearly 67,000-sq ft commercial building Peninsula Spenta in central Mumbai’s Lower Parel locality. The company has recorded consideration to be received from this sale at Rs 156.06 crore.

Recently, rating agency ICRA downgraded Peninsula Land’s debentures worth Rs 530.53 crore to ICRA C from ICRA BB (Negative) owing to irregularities in debt servicing due to poor liquidity position.

“The cash flow position of the company is severely impacted due to delays in collections of sizeable sold inventory as well as weak sales velocity in ongoing and completed projects. The company also faces high refinancing risk given sizeable debt repayment obligations (excluding collection linked payments)aggregating to Rs. 1,167 crore in the next twelve months,” ICRA had said in its ratings statement in November.

On a consolidated basis, the company’s debt level was at Rs 2,310 crore as on July 2019 including project-level debt. For the quarter ended September, the company reported net loss of Rs 220.10 crore and revenue of Rs 10.08 crore. The company has been reporting net loss at consolidated level over the last several years. During the last financial year 2018-19 (April-March), it reported net loss of Rs 777.91 crore and revenue of Rs 134.96 crore.