IPO-bound real estate developer Ashwin Sheth group announced that it has sealed a funding agreement worth $65 million (around Rs 540 crore) with Asia-focused fund PAG to acquire a 50 percent stake in the stressed One Marina luxury real estate development at Marine Drive in Mumbai, from Vallabh Sheth and Jitendra Sheth, of the firm Sheth Creators. The project has a gross development value of around Rs 2,300 crore, a release said.
The funding will be used for construction of the 75 storeyed, 1 million square feet-sized property, which has been built till the ninth podium level, sources said. The infusion of funds will also be used to facilitate the exit of JC Flowers ARC, one of the lenders to the project, whose loan from Yes Bank was settled by the Ashwin Sheth Group for it to acquire the 50 percent stake.
The other 50 percent stake in the project is held by YM Infra, the owner of the land parcel on which One Marina is being built, next to the Princess Street flyover. Of the total project area of 1 million square feet, the Ashwin Sheth Group will have a saleable area of 4,00,000 square feet, according to a statement.
Moneycontrol has written to PAG for comment on the deal, and the story will be updated once a response is received.
The new developers said that the acquisition shows the company's focus on the south Mumbai market, which is seeing increased competition from large developers. The group has been in talks for multiple redevelopment opportunities, and is also looking to set up large developments in areas such as Sewri, along the old harbour in south Mumbai.
"With this project we aim at demonstrating our strategic focus on South Mumbai with multiple other upcoming projects to redefine the luxury/ultra-luxury segment. Our partnership with PAG ensures that the project will receive the investment and expertise needed to realize its full potential," said Ashwin Sheth, chairman and managing director of Ashwin Sheth Group.
With new funding secured and the group firmly in charge of the project, the new developers said that it is now focused on turning the project around.
"This partnership is a continuation of our strategy to unlock and deliver value in legacy and underutilized projects. With PAG’s financial support and our proven development track record, One Marina is well-positioned for a successful turnaround," said Sunil Hotchandani, head of fundraising at Ashwin Sheth Group.
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