Prestige Estates to take over $1.4-billion project from bankrupt firm

Prestige Estates Projects will take over a Mum­bai housing project from bankrupt Ariisto Devel­opers following a court decision Tuesday.
 
The Bengaluru-based dev­el­oper plans to launch the first phase of the project by May and second phase toward the end of the year, Prestige’s Chief Executive Officer Venkat K Narayana said by phone on Wednesday.
 
He estimates revenues of more than Rs 100 billion ($1.4 billion) from the 7.5 million square feet under development. “This will be our largest project in Mumbai,” Naray­ana said.
 

Prestige emerged as a top bidder for beleaguered Ariisto in November 2019. But the proceedings were then stuck in court and further delayed due to the pandemic.

 
Creditors had combined claims of about Rs 25 billion, of which Prestige offer­ed to pay Rs 16 billion, according to company officials with knowledge of the matter, who asked not to be identified as the details are private.
 
The court-appointed insolvency resolution professional Jayesh Sanghrajka declined to comment when reached by phone.
 
Under the resolution plan, Prestige will pay Rs 370 crore upfront to creditors and allot them some 800,000 square feet of fully constructed area, Narayana said. Creditors incl­ude HDFC, Piramal Group, IIFL and other wealthy individuals and homebuyers.
 
More than 500 apartments had been stuck for more than a decade as India’s real estate sector saw a series of challenges including a crisis in the shadow banking industry and unfavorable government policies.