ozone group: ozone group will restructure its loan by selling commercial and residential assets

Property developer Ozone Group is looking to restructure its loan by selling commercial and residential assets, according to people familiar with the matter.

The Bengaluru-based company, which has more than Rs 4,000 crore debt on its books, is in talks with developers and investors to sell its assets and reduce its debt.

Yes Bank, Edelweiss Indian Bulls and Piramal Fund Management are among its lenders.

“The company is still trying to stay afloat and is in talks with some of the big global funds to see if they can create a residential platform,” said three people with knowledge of the debt restructuring. “There is no additional disbursement from existing lenders, and any new funding will facilitate liquidity.”

The company’s chairman and chief executive, S Vasudevan, could not be reached for comment.

Ozone had previously raised funds from Piramal Fund Management and Edelweiss for some of its projects in Bengaluru. Yes Bank is exposed to over 5 million square feet of the company’s portfolio.

“Ozone is looking to attract project-level investors and also pursue portfolio-level deals for commercial projects,” one of the previously quoted people said. “He’s considering giving some of his projects over to the small capital development management deal as well.”

In 2022, Ozone WF-8 secured financial assistance from the government-backed Special Window for Affordable and Middle-Income Housing (SWAMIH) fund. The fund has committed Rs 250 crore towards the completion of one of the most prestigious projects in Bengaluru.

“Construction is in full swing and the project is expected to be completed within the next 2 years,” said one of the previously quoted people.

The company has ongoing projects in Mumbai, Bengaluru and Chennai and has delivered 13.5 million square feet of property projects to date, with 48 million square feet in various stages of development, it said on its website.

Ozone has three major township projects under construction across Chennai and Bengaluru.

The group now also plans to focus on developing large township projects of 140+ acres in Bengaluru, Chennai and Goa, and premium development in Mumbai.

The inherent strength of the residential market and the growing importance of owning a home are helping to maintain the growth momentum. With the upcoming holiday season, new home launches and sales are expected to see an uptick.

Residential sales in the nine months to September 2022 (Q1-Q3 of 2022) were 161,000 units, exceeding annual sales in years after 2014, according to JLL’s Residential Market Update – Q3 2022 Annual sales in 2014 were 165,791 units.