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.
"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.
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.
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.
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.
Ambani's financials business, Reliance Capital Ltd also came under scrutiny when global audit firm PwC resigned citing irregularities in the books of accounts. The company rejected the auditor's report.
The company has appointed real estate consulting firm JLL as advisers for leasing out the its headquarters, the executive said.
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