Real estate firm Prestige Group has emerged as the top contender to take over debt-ridden Ariisto Developers, which is currently under insolvency proceedings, with both lenders and homebuyers approving the resolution plan submitted by the Bengaluru-based company, said two people aware of the matter.
As part of the plan, Prestige Group has offered lenders an upfront payment of more than ₹300 crore and area sharing of Ariisto’s project at Mumbai’s Mulund area, said the first person cited above. The resolution plan has been submitted to the National Company Law Tribunal (NCLT) for approval, the person added.
Mumbai-based Ariisto had partially begun building its ‘Ariisto Heavens’ housing project over a 30-acre land parcel. The project is expected to have around 6,000 units in nearly a decade. Of the total, Prestige would build at least 2,000 units in the next three-four years as part of the plan.
“They (Prestige) have submitted plans to give homebuyers their houses. The Committee of Creditors (CoC) has given their approval. Now, it’s for NCLT to decide. This is a large project in Mumbai which has gone under resolution. Hopefully it should get resolved soon,” the person said.
Jayesh Sanghrajka, the resolution professional appointed by the NCLT, declined to comment on the matter. Emailed queries to Prestige Group remained unanswered.
The NCLT had last November admitted insolvency proceedings against Ariisto, which owed around ₹2,500 crore to lenders including HDFC Ltd, IIFL Trustee Ltd and Indiabulls Housing Finance Ltd. The insolvency plea was filed by state-run Bank of India to recover its pending dues of about ₹520 crore.
In August, fresh expressions of interest from prospective buyers were invited for the second time after lenders rejected the resolution plan submitted by another Mumbai-based builder, Keystone Realtors Ltd, also known as Rustomjee group. In the first round, Rustomjee had emerged as the sole bidder.
Mint reported on 27 August that several prominent Mumbai-based real estate firms including Rustomjee Group, Wadhwa and Runwal Group, were in the process of submitting bids for Ariisto.
Large developers such as L&T Realty Ltd and Godrej Properties Ltd have entered Mulund’s housing market in the last few years. Other big developers in the micro-market include Oberoi Realty and Wadhwa Group. According to local brokers, Ariisto’s Mulund land could be worth ₹1,000 crore as per the current market rate.
In a similar case, state-owned NBCC won approval of financial creditors to take over debt-laden Jaypee Infratech Ltd last week, rekindling hopes of homebuyers finally receiving their promised flats over the next four years.
For Prestige, the deal would allow it to expand further into the Mumbai real estate market. The last few years have seen the Bengaluru-based firm engaged in discussions with several Mumbai-based developers and land owners to sign up joint developments for both residential and office projects in the city.