With DLF and its joint venture partner, Dubai World?s real estate development arm, Limitless Holdings, deciding to exit the Bangalore Metropolitan Region Development Authority?s (BMRDA?s) 9,300-acre Bidadi Satellite Township Project near Bangalore, Limitless Holdings has sought refund from the government for its investment of Rs 200 crore.
The government?s permission is a must since there?s a lock-in of three years for repatriation on foreign firms if they invest in real estate projects in India.
In October 2007, DLF and Limitless Holdings through a 50:50 joint venture had emerged the sole bidder for the project, christened ?Knowledge Park?.
Since the Karnataka government could not acquire land for the project, the two pulled out of the project in 2009. Subsequently, the Karnataka government had returned Rs 400 crore to the joint venture firm. To get its share of Rs 200 crore, Limitless now needs the government?s approval since three years have not elapsed from the time the funds were brought it.
In its proposal to the foreign investment promotion board (FIPB), Limitless has urged for allowing it to transfer the equity held by it in the JV to DLF.
It has said that after the transfer of funds from Limitless to DLF, the latter will get enough leeway to utilise funds in a manner it wants or utilise in any other realty business.
When contacted a DLF spokesperson said that they cannot comment on the matter as the application is before the government.
Limitless has said that it has suffered losses on account of unnecessary locking of capital in the project, foreign exchange loss owing to depreciation of rupee since inception of the project and loss on proposed sale of shares to DLF on discount.
Both DLF and Limitless need funds and no purpose will be served in continuing with the JV, the company has said.
The Bidadi project was scheduled to begin in the first half of 2008, with project completion scheduled for 2016.