Bombay Dyeing, a prominent business entity, witnessed a 4 per cent hike in its share price in early trading on October 17. The surge was a result of the company's announcement of a significant property sale in Mumbai's Worli region.
The company reported that it had sold a piece of property in Worli for approximately INR 4,675 crore. This sale led to the company's shares trading at INR 159.30 on BSE at 9.25 am.
On October 16, Bombay Dyeing transferred the land and related FSI of Phase-I in Worli to Goisu Realty Private Limited, a division of Sumitomo Realty & Development Company Limited. The total transaction amounted to about INR 4,675 crore.
The proceeds from this sale are earmarked for repaying the company's loans. The remaining funds will be invested in authorised securities to fuel future growth.
The board of directors approved the sale of the 22-acre land parcel (along with any related FSI) to Goisu Realty Private Limited in two phases for a sum of around INR 5,200 crore. The board also gave its nod to develop unutilized land parcels available to the company.
The remaining sum of around INR 525 crore will be paid upon the fulfilment of certain requirements by the company and the execution and conclusion of definitive agreements for Phase-II.
Post-transaction, Bombay Dyeing is expected to report a huge positive net worth and record a pre-tax profit of INR 4,300 crores due to this transaction. The company plans to pay all its debts, save on interest costs, pay future dividends, release encumbered assets, and maintain a strong balance to fund future real estate projects.
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