CG Power to put its Worli head office up for sale

MUMBAI: CG Power and Industrial Solutions will soon put on the block its corporate head office building, a landmark in Mumbai’s posh Worli area, as a part of its plan to monetise assets to help revive the cash-strapped company.

The company is dealing with muted cash flows and huge debt at a time when an alleged fraud in the company has come to light. The company will monetise assets like head office building ‘CG House’ and is also working with lenders to resolve its debt issues after nine of its fourteen lenders, constituting 88% of total outstanding credit facilities of the company by value, signed an Inter Creditor Agreement (ICA).

“Our intent is to monetise our assets, which would mean consummating the deal for sale of Kanjurmarg land. We will put ‘CG House’ on the block. We will also go for semi-equity or an equity issuance,” Sudhir Mathur, executive director, told investors on Wednesday.

The company is in pact to sell its land at Kanjurmarg to Evie Real Estate for Rs 279.94 crores. The company did not share valuation of ‘CG House’. According to the website of the real estate firm Jones Lang LaSalle, which lists ‘CG House’ for rent, the building has 13 floors and a total area of 80,424 square feet.

Mathur said the company is conducting a ‘deep’ study on potential of overseas arms to be concluded in two months, after which a decision on their future would be taken.

“Our first job is to protect the India business, where the margins are great and CG brand is valued. With limited capital, our priority will be India business. Internationally, all options are open, including getting investors there partially,” he said.

The monetisation of assets will ease the company’s stretched working capital position which is curbing its ability to grow. “A significant part of the operating cash flow from previous year and till we signed an ICA has gone towards repayments and interest payments. As a consequence of that, our overdue creditors have shot up significantly and our working capital is strained,” Mathur said.

He said the company aims to raise funds through an equity or quasi-equity issue and has sought the regulator’s exemption from a certain clause. ET was first to report that the company aims to raise around ?800 crore for which it sought an exemption for the Securities and Exchange Board of India from a norm that bans companies from accessing the capital market if promoter and directors have been banned from the markets, as is the case with CG.


Leave a Reply