Reliance Group to lease out company headquarters to cut debt

Reliance Infrastructure

01/07/2019 14:24

* Group headquarters located in prime Mumbai suburb
    * Decision to lease out latest sign of group's troubles

    MUMBAI, July 1 (Reuters) - Reliance Group is looking to
lease out its headquarters in one of Mumbai's prime suburbs, the
telecoms to infrastructure conglomerate said, a move that will
help the company to raise funds to pay off debt.
    Some of the companies under the Reliance Group conglomerate,
controlled by businessman Anil Ambani, have been hit by a spate
of credit ratings downgrades and auditing issues.  urn:newsml:reuters.com:*:nL4N23O3LH
 urn:newsml:reuters.com:*:nL4N23X3QL
    "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. It did not comment on the financial details of the deal or
the group's financial condition.
    Ambani is the younger brother of Asia's richest man Mukesh
Ambani. A feud between the brothers over control the Reliance
empire broke out after the death of their father in 2002. The
Reliance businesses were split up in 2005 as part of a
settlement between them. 
    That made them both billionaires but while Mukesh's energy,
telecoms and retail conglomerate had gone from strength to
strength, Anil's companies have struggled.
    Mukesh, however, appears more recently to have offered some
kind of support to his younger brother so he could repay $80
million in debt to Swedish telecom company Ericsson  ERICb.ST . 
  urn:newsml:reuters.com:*:nL3N2153CH
    
    DEBTS
    The company headquarters, located along a busy highway in
the premium commercial area of western Mumbai, is spread over
0.7 million square feet and accommodates more than 3,000
employees, a Reliance executive said. The property is under
control of the flagship company of the group, Reliance
Infrastructure Ltd  RLIN.NS .
    Reliance Infrastructure, known as R-Infra, builds and runs
bridges, roads, metro rail and power plants, and operates the
company's fledgling defence business. It is one of the most
indebted companies under the Reliance umbrella and has sold off
assets in the past two years. 
    It currently has debts of 150 billion rupees ($2.17 billion)
and Ambani said last month that he would sell off all its road
assets as it seeks to become a debt-free company by next
year. urn:newsml:reuters.com:*:nL3N2112B0
    Reliance Infrastructure reported heavy losses in its fourth
quarter results. Its auditors raised red flags around the latest
results and cast doubts over the manner in which the firm had
accounted for several transactions. urn:newsml:reuters.com:*:nL4N23X3QL urn:newsml:reuters.com:*:nL4N23O3LH
    Ambani's financials business, Reliance Capital Ltd  RLCP.NS 
also came under scrutiny when global audit firm PwC resigned
citing irregularities in the books of accounts. The company
rejected the auditor's report.  urn:newsml:reuters.com:*:nL4N23K1BO
    The company has appointed real estate consulting firm JLL as
advisers for leasing out the its headquarters, the executive
said. 
    JLL did not reply to an email seeking comment.
($1 = 69.0550 Indian rupees)

 (Reporting by Promit Mukherjee
Editing by Martin Howell and Jane Merriman)
 ((promit.mukherjee@thomsonreuters.com; +91-22-6180-7516;
Reuters Messaging:
promit.mukherjee.thomsonreuters.com@reuters.net))