A 15-acre Digvijay Mill land in the south Mumbai area of Bycullah in 2010 was the one for which real estate developer, Housing Development and Infrastructure?s (HDIL) promoter Sarang Wadhawan sold 50 lakh shares worth R57 crore, last month, leading to a sharp fall in the company?s stock price. So far R350 crore has been paid for the land, but the said transaction is under litigation and it is being heard by the Supreme Court.
Wadhawan, also vice-chairman and managing director, had sold a large chunk of his promoter shares bringing down his stake to 0.99% from 2.19%. The company had later clarified that the money was required to meet some payment obligations towards a land purchased in 2010.
The company?s share price tumbled almost 40% in three days between January 21 and January 24, 2013, on investors worries over HDIL?s financial health, given its high debt and 98% of promoter shareholding pledged.
FE learnt that replying to an investor query on Friday, a senior company official confirmed the transaction, however, declined to divulge any details saying the matter is sub-judice.
Sources told FE that the said land parcel is believed to belong to an individual named Behramji Jijibhoy, who in the early 1900s had leased the land to National Textile Corporation (NTC) on a 100-year lease. After the expiry of the lease in 1999-2000, Jijibhoy is said to have regained the ownership of the plot, and later sold the land to HDIL.
However, NTC claimed that the lease period was still valid and approached the lower courts and later the Bombay High Court for the resolution of the matter in its favour. It is understood that having lost the case here, NTC approached the Supreme Court and now a final decision on the matter is awaited.
In an effort to generate cash flows to reduce its debt, a senior official also told investors that the company will be launching 8-10 million square feet of residential space in the next one year around Mumbai. It is also looking to make a foray in the premium residential market, with a about 1 million square feet project in Ghatkopar, a central Mumbai suburban area.
