Bata India Ltd (BIL) has restructured its agreements with the Calcutta Metropolitan Group with whom it has set up a joint venture to develop its riverside properties in Batanagar in West Bengal where it has a large factory.
BIL will receive Rs. 100 crore upfront in cash following this recast.
The company said it was doing this to focus on its core business of manufacturing and selling footwear and accessories and also to de-risk itself. It, however, reassured the West Bengal Government that despite the restructuring, it would remain committed to the State government in terms of the approvals given by it towards the project. “BIL's factory will continue to operate from the site and BIL continues to make additional investments in the factory.” The agreement on restructuring has been entered into on April 28.
BIL had entered into the agreements to develop surplus land at Maheshtala at Batanagar in South 24 Parganas district. The project, on the south-western fringes of the city, on the banks of Hooghly river involved the setting up of an integrated township.
A company release said that the township development and management needed specialised experience, skills and resources and BIL had decided to concentrate on its core business, leaving the responsibility for the development and management of the project to the joint venture partners who were experts in the field.
The company said that it would receive an aggregate upfront amount of Rs. 100 crore for “future transfer of shares in the joint venture company and variation of development rights.” In addition, the company will receive 6.40 lakh sq. ft. of constructed space free of cost over a defined period.
It may be mentioned here that two special purpose vehicles were floated for the projects — Riverside Developers Private Ltd and Riverside Holdings Private Ltd. While the first one was to be involved in setting up the township on 200-odd acres, the other was to set up an information technology (IT) park or a special economic zone (SEZ) on a smaller tract of land.
