Prestige Group may raise Rs 1k cr to refinance costly debt

Mumbai: Bangalore based real estate developer, Prestige Group is in advanced stage to raise ₹1,050 crore from a clutch of lenders, led by Kotak Mahindra Bank, at 10.81% to refinance high-cost borrowing from Yes Bank. Prestige is currently developing a project in New Delhi’s Aerocity.

The secured debt facility, with a three-year tenor maturing in January 2028, will be raised at Bamboo Hotel and Global Centre (Delhi). (BHGCPL) a joint venture between Prestige Group and DB Realty, which is developing a large scale mixed-use project in New Delhi’s Aerocity.

A Kotak spokesperson did not immediately respond to a request for comment, while the Prestige spokesperson could not be reached for a comment.

BHGCPL has been facing liquidity pressure to complete the Aerocity project. As of September 30, 2024, the company had just ₹51 crore in unencumbered cash while requiring ₹2,074 crore to cover pending costs, according to an ICRA report.

The funding gap is expected to be bridged through ₹1,020 crore in new debt, ₹57 crore in receivables from Delhi International Airport Ltd. (DIAL), ₹25 crore in tenant security deposits, and promoter contributions.

Originally founded by DB Realty in 2008 as Heaven Star Realty, Prestige acquired a 50% stake in FY20. The project in Aerocity, New Delhi, includes two luxury hotels – St. Regis (189 rooms) and Marriott Marquis (590 rooms) – along with a 0.3 million sq. ft. conference center and 0.61 million sq. ft. of office space under Prestige Trade Centre.The total project cost is ₹5,400 crore, funded through 46% debt, 51% promoter equity, and 3% from receivables and tenant deposits.