Prestige Group may Raise Rs 1000 Crores to Refinance Debts

Prestige Group is in the advanced stage to raise Rs. 1050 Crores from a clutch of lenders that are led by Kotak Mahindra Bank. They wish to replace high-cost borrowing from Yes Bank at 10.81% and want to refinance the cost. Prestige Group is currently developing a new project in New Delhi's Aerocity. It is a high profile mixed-use luxury project.

The Aerocity project is the foundation of Prestige Group’s development portfolio. The project has:

• A 0.3 million sq. ft. conference centre
• 0.61 million sq. ft. of office area under the Prestige Trade Centre

• 2 premium hotels
• St. Regis with 189 rooms
• Marriott Marquis with 590 rooms

The new debt comes with a 3 year tenor. It will mature in January 2028. It will be raised at the Global Centre and the Bamboo Hotel in Delhi. The financing move is arranged through BHGCPL, which is a joint venture between Prestige Group and DB Realty. It is responsible for developing the Aerocity project. It is a critical step to reduce the burden of costly borrowing.

BHGCPL is under liquidity pressure. As of Sep 30, 2024, the company had only Rs. 51 Crores in cash while facing pending project costs of Rs. 2,074 Crores. To bridge the funding gap, the measures are planned:

• New Debt: Rs. 1020 Crores will be raised.
• Tenant Deposits: Rs. 25 Crores from tenant security deposits.
• Promoter Contributions: Equity injections by the promoters.
• Receivables: Rs. 57 Crores is expected from receivables owed by Delhi Airport Ltd.

This is designed to ensure that liquidity constraints do not hinder the progress of the Aerocity project.

With a total project cost of Rs. 5,400 Crores, the financing structure has 51% promoter equity, 46% debt, and 3% sourced from tenant deposits. The funding mix is critical for the timely of the Aerocity project. It not only reflects the company’s approach to better financial management but also shows its commitment to delivering quality projects in challenging market conditions.

As Prestige Group advances with the refinancing efforts, the closure of Rs. 1,050 Crores is expected to reduce its high-cost debt exposure. It will give the needed financial relief. It will support the completion of the Aerocity project that will set a benchmark in New Delhi’s landscape.

Prestige Group Prelaunch Project is Prestige Spring Heights