Lenders had initiated SARFAESI proceedings to recover their dues totalling ₹571 crore from the company but they received no bids until the end of the auction deadline on Monday at a reserve price of ₹500 crore.
“There were no bids in the auction which ended this week. Now banks will meet and decide whether to try for another round of auction at a lower reserve price or seek to sell the loans at a haircut to asset reconstruction companies (ARCs),” said a person aware of the details.
Canara Bank and Punjab National Bank (PNB) are the two primary charge holders in the account as they are direct lenders to the company. Canara Bank is the lead lender with ₹131 crore of loans outstanding, while PNB has primary dues of ₹90 crore, ET reported in September last year.
PNB, along with Union Bank of India, also has a secondary charge over the company’s assets because they had together lent ₹350 crore to a group company, Future Brands, with lease rental discounting of BMMCPL as collateral.
“Future Brands itself is a distressed account where chances of any recovery are almost nothing. This mall which is in the heart of Mumbai is probably the only option for recovery,” said a second person aware of the process.SOBO Central Mall has no tenants except a McDonald’s joint which was launched when it was inaugurated in 1999. It is Mumbai’s oldest mall with a total leasable area of 150,000 square feet. But the emergence of new shopping places within the city and in the suburbs and the Covid shock meant that it never recovered from a slump. Besides, almost all its real estate was given out to Future Group companies which themselves were under stress.Lenders are still hoping that the redevelopment potential for the four-storey commercial building could attract real estate investors and help banks in recovery.
Banks have lost more than ₹33,000 crore to the Future Group, as the flagship Future Retail went into liquidation while Future Enterprises is undergoing a second resolution process after the first one failed to get a buyer.
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