Prestige Group Eyes Rs. 1,050 Crore Debt Refinance to Ease Liquidity Pressures on Aerocity Project

📅 February 20, 2025

Bangalore-based real estate developer Prestige Group is in the advanced stages of securing a 1,050 crore debt refinance from a consortium led by Kotak Mahindra Bank. The secured facility, offered at an interest rate of 10.81%, is intended to replace high-cost borrowing from Yes Bank and address significant liquidity challenges facing its high-profile mixed-use project in New Delhi's Aerocity.

Refinancing Strategy and Secured Debt Facility

The new debt facility comes with a three-year tenor, set to mature in January 2028, and will be raised at the Bamboo Hotel and Global Centre in Delhi. This financing move is being orchestrated through BHGCPL—a joint venture between Prestige Group and DB Realty—which is responsible for developing the expansive Aerocity project. The initiative is a critical step toward streamlining the developer’s financial structure and reducing the burden of costly borrowing.

Addressing Liquidity Pressures

Recent reports by ICRA indicate that BHGCPL has been under significant liquidity pressure. As of September 30, 2024, the company held only Rs. 51 crore in unencumbered cash while facing pending project costs of Rs. 2,074 crore. To bridge this funding gap, the following measures are planned:

New Debt: Approximately Rs. 1,020 crore will be raised.
Receivables: Rs. 57 crore is expected from receivables owed by Delhi International Airport Ltd. (DIAL).
Tenant Deposits: An infusion of Rs. 25 crore from tenant security deposits.
Promoter Contributions: Additional equity injections by the promoters.

This comprehensive strategy is designed to ensure that liquidity constraints do not impede the progress of the Aerocity project.