NEW DELHI: As part of fashion retailer Raymond’s ongoing asset monetisation plan to improve cash flow amidst a broader slowdown in demand, the textile firm has sold a massive 20-acre land parcel in Mumbai’s Thane area to private equity major Xander Group’s retail arm Virtuous Retail South Asia (VRSA) for USD 100 million or over Rs 710 crore.
As part of the deal, VRSA is looking to invest additional USD 240 million (over Rs 1,700 crore) to develop the site, taking its total investment to over Rs 2,400 crore. VRSA is planning to build a 3.7 million sq ft mixed-use city center project anchored by a 2.4 million sq ft VR retail flagship development.
"The sale of JKIT land parcel is a major step towards our strategy of asset monetisation and value creation for our shareholders," said Gautam Hari Singhania, chairman and managing director Raymond Ltd, in the exchange filing.
Earlier this year, the company said it was likely to turn free cash flow in the financial year ending March 2019. That didn’t happen. The slowdown in the economy and demand may have made matters worse in the months that followed with Raymond sitting on a debt pile of nearly Rs 2,300 crore.
Sid Yog, founder and chairman of Board, VRSA, said, “Prime land parcels of this size seldom trade, especially in major metropolitan markets like Mumbai. We have been waiting patiently for the ideal opportunity to expand our award-winning portfolio in Mumbai.”
The land parcel acquired by VRSA is part of a bigger 125-acre contiguous land parcel at Thane’s Cadbury Junction owned by Raymond. In March this year, the company had entered into the real estate development business with the launch of a residential project within the vicinity.