Chennai: Cash strapped Reliance Group, in a bid to raise funds to pay off debt is reportedly looking to lease out its headquarters in one of Mumbai’s prime suburbs. The property is under control of the flagship company of the group, Reliance Infrastructure Ltd.
“Reliance infrastructure plans to monetise its marquee Reliance Center Office located in Santacruz East, Mumbai,” the company said in a statement.
Reliance will continue to own the premises and proceeds from the leasing deal will go only for debt reduction, the company said.
Companies under the Reliance Group banner helmed by Anil Ambani have faced tough times with credit ratings downgrades and auditing issues.
The company headquarters is spread over 0.7 million square feet and accommodates more than 3,000 employees, a Reliance executive is reported to have said.
Anil Ambani is said to have come to the decision as Reliance Infrastructure has become one of the most indebted companies under the Reliance umbrella and has sold off assets in the past two years to make matters ease a bit.
Reliance Infra currently has debts of Rs 15,000 crore ($2.17 billion) and Anil Ambani had said last month that he would sell off all its road assets as it seeks to become a debt-free company by next year. It must be noted that Reliance Infra also operates the company’s fledgling defence business.
With Reliance Infrastructure reporting heavy losses in its fourth quarter and with its auditors raising red flags, casting doubts over the manner in which the firm had accounted for several transactions, the firm, according to experts has much to deal with.
Anil Ambani’s financials business, Reliance Capital Ltd also came under scrutiny when global audit firm PwC resigned citing irregularities in the books of accounts. Reliance Industries’ market capitalisation is Rs 8.04 lakh crore.
|Investors are valuing Reliance Retail way above those of its listed peers as valuations crossed Rs 2.5 lakh crore last week in the unofficial market.
It is 75 per cent more than the market capitalisation of seven listed rivals put together, stated reports.
Reliance Retail shares, which started trading in the past two weeks in the unlisted market, are currently trading between Rs 475 and Rs 500 apiece. These shares belong to employees of the company, said brokers.
The valuations are higher than those of Avenue Supermarts, owner of DMart, Future Retail, Trent and Spencer’s put together.