Yes Bank Takes Over Bankrupt Anil Ambani’s Reliance Center In A Bid To Recoup ₹2,892 Crores Default

Reliance Center
Reliance Center

The Mumbai headquarters of Anil Ambani’s Reliance Group, which is known as the Reliance Center would soon be taken over by Yes Bank. The private bank taking over the Reliance Center is planning to sell the property or to use the property and turn it into their office. After Reliance failed to repay dues amounting a total of ₹ 2,892 crores to the private lender in July, the bank had taken ‘symbolic possession’ of Reliance Center. Anil Ambani’s group has been one of the largest borrowers of the Yes Bank with an estimated exposure of over ₹ 12,000 crores. Reliance Center is located off the Western Express Highway and situated near the Mumbai airport.

Yes Bank MD & CEO Prashant Kumar told Times of India, “This is a security for our loan. We had already taken symbolic possession, now we are moving to take physical possession. We would like to monetize it, but we may also move our offices there.”

The private lender took the action against Anil Ambani’s Reliance under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. Under these sections, the bank aims to recover dues worth Rs 2,892 crore from Reliance Infrastructure. As said by the law, the bank had given the company a two-month prior notice regarding the possession in May.

A Reliance Infrastructure spokesperson said to Times of India, “The matter is sub judice, and as legally advised, the company will take all effective steps to protect its interest.”

The news agency also reports sayings from sources that claim that the bank’s planning to sell the property is premature as legal actions could go on for some time.

The same report claims that during the pandemic when the economy was down, the 21,432 sqm plot was valued between ₹ 1,000 and ₹ 1,100 crores. The current situation in the country is such that the real estate market is subdued and the need for large office spaces is low as work from home has become the new normal.

Earlier in June, a Canadian investment firm, Brookfield acquired two floors of office space for ₹ 490 crores. The office space was earlier owned by Jet Airways.

Earlier, the Reliance Center was known as Cresent House and was owned by Kolkata based ICI. The project was built on Mumbai Port Trust land. Ambani family acquired the property as the then undivided Reliance Industries took over businesses of ICI in the early 1990s. After the death of Dhirubhai Ambani and thereafter the clash between the two brothers saw the Reliance Industries get divided between the brothers in 2005. It was then that the Ballard Estate went to Anil Ambani’s Reliance Group. Maharashtra government’s civil supplies department occupies a portion of the Ballard Estate which they won through legal battles a few years back.

Reliance Group had shifted its headquarters in 2018. Due to the debt crisis, Anil Ambani’s group had shrunk their operations. Most of the offices were put in the north wing and a part of the property was listed for lease.