Mafatlal puts city property on the block

MUMBAI: Mafatlal Industries, a part of the Arvind Mafatlal Group, has put an 85,000 sq ft property in central Mumbai on the block hoping to generate between Rs 100 crore and Rs 150 crore. The proceeds will be used to revive the operations of the loss-making company. (Watch)

A senior company official confirmed the decision to sell the property and said the bidding process could start in a couple of days.

Located at Lower Parel, the building called Mafatlal Chambers B, is one of the many properties in the city owned by the group. Sources familiar with the development said some high net worth individuals (HNI) and large corporates have evinced interest in buying the property.

Cushman & Wakefield (C&W), the international property consultant, is advising Mafatlal Industries on the deal.
Industry trackers said the prevailing rate for commercial property in central Mumbai is in the range of Rs 15,000-20,000 per sq ft. The minimum bid price for this property has been set at Rs 11,000 per sq ft. All the bids will be evaluated by an asset sales committee appointed by the Board for Industrial and Financial Reconstruction (BIFR), a government body, which attempts to turn around loss-making companies. Mafatlal Industries has been declared a sick company in 2002.

The proposed sale is part of a turnaround exercise initiated by the group. It is learnt that this property could be sold in parts depending on the need and the affordability of the potential buyers. The rent in central Mumbai for commercial property is between Rs 160-200 per sq ft.

The BIFR-approved rehabilitation scheme has split Mafatlal Industries into three parts. The chemical division has been demerged into a company called Polyolefins Rubber Chemicals (PRCL), while some surplus and non productive assets and investments have been transferred into a special purpose vehicle called Sulakshana Securities (SSL). The textile operations remain with Mafatlal Industries.