Deal Details

Project Park was conceptualized with a view to design and build an Industrial Park with infrastructure adhering to international standards and support amenities which would aid the growth of the MSME Industries. This park was owned by “Project Park Company”.

• The Park is located in the state of Tamil Nadu and is spread across ~600 acres of land.
• Currently, around 50 industries are currently operating in the Industrial Park premises.

Components of the Park:

• 600 acres of Industrial Land
• Wide roads designed for heavy freight movement
• Power availability with a 28 MW electrical substation
• Dedicated water supply with 2 overhead tanks of 2M litres storage
• Common Sewage Treatment Plant with a capacity of 150 KLD
• Storm water drainage & rainwater harvesting
• Optic Fibre Cable for communication
• Built to Suit factory sheds
• Small Industry Cluster
• Workers’ Hostel accommodating ~400 employees

Target Industries/Clusters:

• Defence – Presence of Ordinance Factory & HAPP providing an ecosystem for the cluster to exist and survive
• Electric Vehicles – TN Government support for EV Cluster is very high in the Priority list
• Logistics – Central location & Connectivity provides a geographical advantage for a Logistics Hub
• Social Infrastructures (Educational Institutions, Hospitals, Training centres, Multiplex, Hospitality, etc.)

Advantages:

• DTCP Approved Master Plan
• PCB Pre-approval to operate Orange & Green Category Industries
• Land use converted to General Industrial Zone
• Centrally & Strategically located in Tamil Nadu & South India
• Excellent Connectivity to all major cities by Road, Rail, Air & Ports
• Availability of economically viable skilled & unskilled workforce in the demography
• Common Cluster Centre for MSME Industries

Revenue Potential:

• Project Park is divided into 2 phases. Plots in phase 1 are developed and out of the 380 acres of land, 230 acres have been sold and the remaining 150 acres are available for sale.
• Phase 2 plots aggregating to 220 acres are yet undeveloped and would be ready for sale once additional expenses to develop the property are incurred.
• A few plots in the Park have historically been sold at a rate of Rs. 60 lakh per acre. Assuming that the Promoters manage to sell all the remaining plots at a similar rate, the Revenue potential of the Industrial park can be estimated around Rs. 220 crores.

Acquisition under CIRP:
During the course of aggregating the land parcels and developing the Park, Project Park Partner invested ~Rs. 80 crores in Project Park Company and raised a debt from a Bank to the tune of Rs. 75 crores. Due to the slowing trend in sales and low collections, Project Park Company was unable to timely service its debt and thereafter, was classified as an NPA by the Bank. The Bank later assigned the debt to an ARC. Post assignment, on the collapse of Project Park Partner, the ARC initiated IBC proceedings against Project Park Company. As per the proposed resolution plan, the Resolution Applicant (ISPL) has submitted an LOI for acquisition of the Industrial Park assets at a cost of Rs. 40 crores. An initial deposit of Rs. 5 crores has been paid by the RA.

Investment Modality:
The Investment Amount of Rs. 50 Crores shall be brought in by the Incoming Investor in 3 tranches as under:
Amount (Rs. In Crores)-Event

• 5.00 -On Signing of Definitive Documentation
• 35.00- Within 7 days of receiving a favourable order from the NCLT
• 10.00- On Allotment of 50% Equity
• 50.00= Total

Return:
Assuming an average sales rate ranging between Rs. 50 lakhs per acre to Rs. 66 lakhs per acre, the Incoming Investor shall enjoy a cash inflow ranging from Rs. 76.50 crores to Rs. 106 crores. This return would roughly translate to an Investment Multiple ranging between 1.53x to 2.12x.