Kishore Biyani pays off creditors led by Canara Bank by selling SOBO mall to K Raheja Corp: Report

Future Group promoter Kishore Biyani has reportedly settled dues worth Rs 571 crore to lenders of Bansi Mall Management Company by making a one-time settlement of Rs 476 crore. This amount is 83% of the total dues for the creditors. 

The settlement was backed by realty developer K Raheja Corp., which acquired SOBO Central Mall, the Economic Times reported. SOBO Central, which was earlier known as Crossroads, was India’s first mall that opened in late 1990s.

Last month it was reported that  Biyani made an offer of Rs 476 crore as a one-time settlement of Rs 571-crore debt of Bansi Mall Management that owns SOBO Central Mall in Mumbai’s Haji Ali to a group of lenders led by Canara Bank. Biyani’s offer came after the creditors approved a Rs 475-crore bid from Runwal Group for the asset. Creditors led by Canara Bank had put the property on the block to recover their dues. 

K Raheja Corp. Real Estate, which is part of K Raheja Corp., bought the mall with leasable area of nearly 150,000 sq ft. It paid stamp duty of Rs 28.56 crore for registering the deal that took place on Monday, ET report stated based on documents accessed through Propstack.

The SOBO Central Mall, inaugurated in 1999, currently houses a sole McDonald’s establishment. The mall faced significant challenges due to the impact of COVID-19, competition from new retail developments within the city, and substantial space allocations to various Future Group companies, which were experiencing financial difficulties themselves.

The financial default by Bansi Mall Management Company compelled creditors to commence proceedings in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Last uear, Jindal (India), which is part of the BC Jindal Group, emerged as the sole bidder for Kishore Biyani's Future Enterprises Limited (FEL). The Kolkata-based steel tubes and pipes maker Jindal's plan was the only one that was submitted to the creditors till last week. 

The Corporate Insolvency Resolution Process (CIRP) against Future Retail was started by its creditors following loan defaults in 2022. The Kishore Biyani-led Future group firm had significant borrowings in the form of bonds and thus, several trusteeship companies have filed claims. 

The retain chain owes a total of Rs 12,265 crore to its creditors. Centbank Financial Services had filed the highest claim of Rs 3,344 crore, followed by Axis Trustee Services at Rs 1,341 crore and Vistra ITCL (India) at Rs 210 crore.