MARINE LINES | India Tower | 720 m | 125 fl | On Hold

[dunefreezer]

Finally an update from the Media.

Source

We don't have specific asset on block: N sridhar


Mumbai-based DB Realty faced several headwinds after its promoters were sent to jail in connection with their alleged role in the 2G telecom spectrum allocation case. N sridhar, group director (business strategy & finance) played a key role in managing the property and hospitality business of the company in the absence of the promoters. Raghavendra Kamath spoke to him about the state of DB Realty projects and the way ahead for the company, within days of Etisalat DB (the telecom joint venture of the group with UAE’s Etisalat) announcing closure. Edited excerpts:

What is the progress on the Bandra MIG project in Mumbai? When will you start that?
DB Realty plans to launch the MIG project in the current financial year. We are in the process of getting the necessary approvals and are fully equipped to execute the project.

- DB Realty sees no financial impact from Etisalat exit
- DB Realty tanks 6% at Etisalat shuts shop
- DB Realty net falls to Rs 12 cr
- New operators shocked by SC verdict, may file review petition
- DB Realty official supports his statement to CBI
- Stocks of controversial groups beaten down in 2011

When will you complete your projects such as Orchid Turf View, Orchid Crown and others in South Mumbai which have faced environmental issues and regulatory hurdles?
With the new regulatory changes (changes in development control rules), we are looking at optimising these projects as per the new norms and securing fresh approvals wherever required. Work continues at most of our projects based on the permissions that we have already obtained.


What about the ones such as Orchid Woods, Orchid Suburbia and Orchid Ozone in western suburbs of Mumbai?
The Mahul project—with 8.7 million sq ft —is on schedule for completion by end March 2012. Orchid Ozone, Dahisar —with 2.6 million sq ft —will be completed in a phased manner starting from June 2014, a year ahead of schedule. Orchid Woods, Goregaon (E) —1.2 million sq ft, is nearing completion and will be completed and delivered in this calendar year. All other DB Realty projects are on stream, the company remains committed to completion and delivery of its projects within stipulated time frames.

The BMC (Brihanmumbai Municipal Corporation) had issued a stop-work notice to your hotel project in Marine Lines and the government cancelled higher FSI (floor space index) in your Pune project. What is the status on that?
In our hotel project, there was a difference in interpretation by the government and by us on the levy of premiums. The matter is currently in court; so we cannot comment on it. But we expect a positive outcome. In Pimpri-Chinchwad New township Development Authority project, we have gone for an appeal in the High Court, we expect a favourable outcome and FSI to be granted, keeping the prevalent regulations in mind.

There is a buzz that you are selling your hotel properties and some projects in property business.
They are all baseless speculations. We are not selling any hotels or any properties. On a regular basis we keep evaluating non productive assets which do not generate cash flows and we will continue to optimise all cash generating assets. We are not planning to sell any specific asset either in hospitality or in real estate and have no specific asset on the block for sale.

How many of such non-productive assets have you identified?
On a regular basis, we keep evaluating assets. If we find a good value proposition for disposing them, we may look at the same. As of now, we have not identified any assets to be sold.

What are the headwinds you are facing given the overall economic environment and your image?
Given the current slowdown and tightness in liquidity, it is a challenge to raise funds going forward. As far as DB Realty goes, we have very low gearing. We have gearing of 0.08 to our net worth, leaving us ample headroom to raise funds. As you are aware, most of our projects under execution are sold between 45-90 per cent and thus the collection from the same is adequate for fulfiling our project execution. Wherever there is a minor gap we raise debt for construction finance in specific projects.

How has the whole controversy regarding 2G scam impacted the brand and image of the company? What are you doing to negate that perception?
DB Realty is in the business of real estate development and has no direct or indirect share holding in Etisalat DB. The promoters of DB Realty in their individual capacity invested in Etisalat DB, a company engaged in telecom business. Both the entities are separate and have nothing to do with each other at all. Though the brand has taken a beating in the last one year, buyers, investors and other stake holders through constant communication know that DB Realty’s operations and financials are not impacted by the ongoing 2G proceedings.

How will the shutting down of Etisalat DB impact DB Realty?
Etisalat’s decision to shut down the operations of its Indian joint venture was taken independently by Etisalat UAE and this decision has no bearing or impact on the financials of DB Realty. This matter is for Etisalat DB to comment on as it is not related to DB Realty and there is no connection between the two entities whatsoever.

No suit or claim has been filed against DB Realty since it was never party to any agreements or otherwise. DB Realty was and remains an independent corporate entity managed by a professional team. DB Realty is in the business of real estate development and has no direct or indirect share holding in Etisalat DB. The promoters of DB Realty in their individual capacity invested in Etisalat DB, a company engaged in telecom business. Both the entities are separate and have nothing to do with each other at all.

So it looks like it is still in court. Does it take months or something to clear a case, as I hear?
Looks like they are expecting a positive outcome, so it makes sense when MoD said they might resume construction again. Guess they are preparing for it.

[bharatiya]

dude the wording in these articles is so incredibly vague dones anyone agree with me?

[TutConr]

You never know, some court cases take years.

[MeMumbaikar]

wont take years.


Db's stock in general seems to have recovered a lot in the past months. (though its the same case with the rest of the market)

and they are still making a profit and they have low debts compared to a DLF


I think they should be able to finish this project after the court case.

[sixsigma1978]

no this is excellent news!
remember earlier we had though Enforcement Directorate had attached many DB properties because of the 2g scam - which would have pretty much scuttled this project.

this implies its probably a legal battle b/w DB and BMC (no surprise there - BMC seems to be throwing in a spanner in all high FSI projects) - after all the biddings etc were completed!! BMC's new "Give us more premium for every vertical X FSI breached" mantra is probably the cause (folks can correct or amend this)

Also - I don't read anything about Wakf board which had come up with its version of "its our land - illegally acquired we want to build a religious structure there " dimension - which would have been a greater source for concern!!!

[dunefreezer]

I don't think Marine Lines Project is attached in connection to the 2G scam.

Source

...The five companies named in the ED order include DB Realty, Eversmile Constructions Pvt. Ltd., Conwood Construction and Dynamix Realty

The properties and bank accounts that have been ordered to be attached, include land in Yerwada near Pune, unsold properties at an upscale Mumbai mall and flats worth crores of rupees in Mumbai.

As per the order, the land at Yerwada, worth Rs.13 crore, is owned by Eversmile. Another property worth Rs.23 crore at Shagun Mall on Gen. A.K. Vaidya Marg, is owned by Conwood. Two flats owned by DB Realty in Mumbai, worth Rs.1 crore each, and another flat at Orchid Breeze at Bandra, owned by Nihar Constructions, have also been ordered to be attached...

Source

...The value of properties attached of these companies are Dynamix Realty (Rs 134 crore), Conwood Construction and Developers (Rs 22 crore), Nihar Constructions (Rs 1.10 crore), DB Realty (Rs 52 crore) and Eversmile Construction Company (Rs 13 crore)...

Can anyone verify this?

[sixsigma1978]

The real problem here is the Premium.

DB Realty wants to pay 20 Crore. BMC wants them to pay 200 Cr. BMC states it has reduced the premium from 416 crores to 200 Crores and isn't budging.
Ultimately - if the case isn't resolved fast- I'm guessing they'll reach a compromise and restart the work. Either way, DB's defence seems very flimsy (underlined) - dont know how they think they'll win the case!

The BMC has issued a stopwork notice to DB Hospitality’s hotel project at Charni Road for failing to pay Rs 200 crore in arrears. Civic sources said the demand of Rs 460 crore was reduced to Rs 212 crore when portions of the building were included in the floor space index (FSI), the ratio of total built up area vis-a-vis plot size.
DB moved the Bombay high court (HC), saying the premium was Rs 20 crore. It urged the court to save it against “unwarranted cost escalations due to illegal stop work” and “save loss to the national GDP”.

The BMC said the premium was levied on non-habitable areas. Municipal commissioner Subodh Kumar said DB must pay the premium, calculated at 25% of the latest ready-reckoner rate. “DB wants the rate fixed at what prevailed in 1970, which is 10%,” Kumar told TOI.

[MeMumbaikar]

hmm will depend on the quality of the lawyer.

I think if DB does win against the BMC it will set a new precedent. More and more builders will goto court.

[IndiansUnite]

Originally Posted by sixsigma1978

Also - I don't read anything about Wakf board which had come up with its version of "its our land - illegally acquired we want to build a religious structure there " dimension - which would have been a greater source for concern!!!

It's standard PR procedure for any company to not reveal much during interviews and limit/spin any difficulties into something positive. No wonder N Sridhar's answers are largely vague and open to interpretation. The question was related to the BMC so obviously he replied in respect to that. Just because he didn't mention Wakf doesn't mean we can rule that out yet.

Originally Posted by dunefreezer

I don't think Marine Lines Project is attached in connection to the 2G scam.

Can anyone verify this?

Yup, its not.

The India tower land is owned by Neelkamal Realtors (subsidiary of DB) along with Balwa/Goenka.

The other companies listed - Eversmile and Conwood are both DB group subsidiaries. If the India tower was involved they would have listed Neelkamal as well.

As far as 2g goes, everything looks clear. The promoters are out and the property hasn't been attached. Balwa has traditionally been the fixer for all the DB projects. Since he just came out of jail, he's been lying low and hasn't greased BMC's palms..YET.

[MeMumbaikar]

they are out on bail though. By no means a done deal.


Its still going to take quite some time to finish this project. (say 5-6 years?)


Plus India tower and the BMC is the least of Balwa's worries

http://business-standard.com/india/n...-fraud/465690/

[IndiansUnite]

6 years sounds right.

Goenka seems to be making his way out of the case. It appears that he no dealing with Etilsat. Balwa might get shaheed (like his first name) so let's see how the case progresses.

Let's please stick to only the tower now

[MeMumbaikar]

Originally Posted by IndiansUnite

6 years sounds right.

Goenka seems to be making his way out of the case. It appears that he no dealing with Etilsat. Balwa might get shaheed (like his first name) so let's see how the case progresses.

Lets put it this way if Balwa and Goenka lose the case of fraud against the emirates its game over for them.

Now i dont know what happens to their chunk of DB hospitality and all.



Even the BMC palm greasing, its not so easy any-more. Look what happened to Kripashankar singh. Politicians in Mumbai are not going to get involved any anything for a while.The sena in the BMC is not stupid to have their palm greased by Balwa or anybody connected to the 2g scam.


However, the lawyers of the BMC are dud. I think DB will win the case simply by getting a good private lawyer. Set the precedent laid down by Enron in the early 90s in the state.



Edit: appologies did not see your last line.This is the last on the issue from me.

[IndiansUnite]

No apologies, it's ok. I didn't mean to cut you off btw

[UDHL]

Maybe I am wrong but as per the name of this project "DB TOWER"...the website http://www.dbrealty.co.in/ shows completely different pictures of this project ( and ofcr different decription). I feel like this project has been completely changed...but hey I am not dissapointed...i guess being an Indian I am just too used to of that.
Can someone tell me what f___ is going on with that. ICoz honestly I am really freaking out :/
Thanks in advance!

[pkalein]

no dude its another project in BKC

[India101]

^Yes, we've gone over this multple times, that is DB Tower, a lowrise commercial building in BKC. This is India Tower, a 720m mix-use tower at Marine Lines, far away from BKC.

[UDHL]

Damn...I don't see this project anywhere on their website. How is it that one of their most expensive and ambitius project of all is not even mentioned on the website???

[dunefreezer]

Because they are building it through DB Hospitality group, and not DB Realty even though DB Realty bought a big share in DB Hospitality. And they don't have a website for DB Hospitality. This is one reason.

The other might be to avoid inviting trouble themselves, since whoever is related (for approval, etc) would all want a share in the pie since this is an ambitious project. That is why they are keeping up a low profile for this project. I mean look what is happening for Kingdom Tower, they are freaking celebrating with the architectural community because I'm guessing they have complete control.

[dunefreezer]

On an another note, for the first time, India Tower has been added to CTBUH 2012
Note: This is not a confirmation that India Tower has resumed construction..Yet.


at 2012-03-15

You can find this image in this PDF in the Future Tallest section.

[UDHL]

nice!