Bata may sell Riverside project stake

Is shoe major Bata India looking to sell some of its stake in the integrated township coming up at Batanagar on the fringes of Kolkata?

The industry grapevine says that the stake could be valued at Rs 8-9 crore per acre and the total deal size is expected to be above Rs 100 crore.

However, the news could not be confirmed.

Bata India is developing the Calcutta Riverside project through two special purpose vehicles. An integrated township is being developed on 237 acres through a joint venture, Riverbank
Developers, in which Bata holds 50% and the Calcutta Metropolitan Group the balance 50%.

Another 25 acres are being developed into an IT park/special economic zone through a second SPV, Riverbank Holdings, in which Riverbank Developers holds 50% and the balance is with PE fund Yatra Capital.

The Calcutta Metropolitan Group, in turn, is a 50:50 joint venture between the United Credit Belani Group and the Kolkata Metropolitan Development Authority.

According to market sources, the stake sale could happen in the integrated township project, in which Bata holds 50%. “The stake could be valued on per-acre basis valuation,” a market source said.

When contacted, a Bata official said, “We do not comment on market speculations.”

Sumit Dabriwala, managing director, Riverbank Holdings, told DNA, “There have been no such discussions. These are mere speculations.”

The first phase of the project on 237 acres includes an integrated township project and rehabilitation of Bata employees. While the rehab programme could be completed by April 2010, the integrated township could start by April 2011. An investment of Rs 3,000 crore is required for the project and Dabriwala said “the funding is in place,” declining to elaborate further.

Dabriwala said there was a need for a second SPV because “an IT SEZ needs a focused application and there are separate guidelines governing this space.”