- 25 Nov 2022
- ICICIdirect Research
Clarifies on proposed Worli transactionOBEROIRLTY - 930 Change: -3.25 (-0.35 %)
Oberoi proposes to pay in one or more tranches an amount aggregating up to Rs 4,000 Crore to Oasis (Worli) as for purchase of residential units reflecting the Company’s share of area in the Project. Oasis in turn will utilize the entire consideration amounts (retaining only amounts for income tax payable on account of the proposed sale of Premises) for (i) repayment to the Company in full, the construction cost funding and the deposits / advances given to the other partner of Oasis, and (ii) balance as distribution of the Company’s portion of the profit in the Project. The company will have little over 50 pct stake in balance inventory vs. ~33% now.
We highlight that transaction being cash neutral (except for stamp duty) is a relief wherein earlier it was expected that it would entail big debt, albeit with 100 pct stake in Worli. Nonetheless, slow Worli offtake, and likely increased supply in MMR market prompts us to maintain neutral stance on the company.