Yes there is substance in the news. This was discussed briefly by the management in the past 2 concalls. Please refer to this comment for some brief details I shared earlier - Max Ventures – A Unique Demerger Opportunity
Additional details (from concall and the article):
- Matter is approved almost unanimously by the Committee of Creditors.
- So the management expects NCLT approval to happen by the end of this FY.
- Once approved and handover done, it will take 4 years to finish the project.
- 550 cr to be paid to the creditors over a period of 4 years. Receivables based on the existing bookings done is around 500 cr. So as Mr. Vachani said in one of the concalls - “NCLT deal is structured such that the inflows to Max Estates matches the outflows to the creditors”.
- Total size of the project is around 3 million sft. 1.5 mil sft is already sold out by earlier developer which Max needs to deliver. Out of the remaining 1.5 mil sft, 0.5 mil sft will be sold to the customers (by Max Estates) and remaining 1 mil sft is commercial RE which will be leased out.
- Project cost is around 2000 cr (I assume this includes the 550 cr to be paid to creditors). Partly will be funded by 0.5 mil sft which will be sold out by Max Estates (high-street retail and service apartments!!??) + 500 cr receivables from existing customers.
- As per article, the peak capex will be 400 cr and if needed there will be financial partner to be roped by Max Estates to fund the project. But as per Mr. Vachani, distressed projects will be completed undertaken by Max Estates alone, so not sure what is the way forward on the complete funding part.
Interesting times ahead.
(On a side note, this is a potential 3 million sft for Max Asset Services to service/manage in the future).
Disc: Invested