Burn Standard Company Ltd is looking to raise funds by unlocking the value of its real estate property in Alipore.
The land, which National Buildings Construction Corporation Ltd (NBCC) is set to buy at the current market rate, will be valued by an independent agency. NBCC plans to develop the plot for a premium housing complex.
The market value for the 11-acre plot could range between Rs 110 -160 crore.
“We have agreed to pay Burn Standard at the current market rate after the valuation is done by an independent agency. NBCC will develop the project on a self-sustaining basis and the profits will be equally shared between the two. Since both are public sector companies, we do not see any problem,” said Arup Roy Choudhury, chairman and managing director of NBCC.
However, Burn Standard, which is under the Board for Industrial and Financial Reconstruction (BIFR), is awaiting approval for the project.
The next BIFR meeting will take place on September 30. Burn Standard’s relief package is in excess of Rs 1,500 crore.
There are also other hurdles such as shifting the existing guest houses, residences and offices. Burn Standard has operations in Bengal, Jharkhand and Tamil Nadu.
NBCC is also developing a Rs 1,500-crore 38-acre township at Mozakulai near Howrah.
“Real estate is one of our major areas of focus in the coming years. We will be building complexes and townships across the country. Our township projects will be different as we plan to provide employment to the locals. Bengal is one of the states where we have a few projects lined up,” said Roy Choudhury.
NBCC has signed a memorandum of understanding with RK Millen in 2007 for a 50:50 joint venture for the Mozakulai project. The township will have commercial and residential spaces, IT parks and malls. There will also be a special employment centre for the local zari workers.
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Burn Standard Company Limited (BSCL) is a Public Sector Undertaking (PSU) of the Government of India. Headquartered in Kolkota, India, BSCL is engaged in civil engineering projects and is a subsidiary of Bharat Bhari Udyog Nigam. The company was formed with the merger of two companies — Burn & Company and Indian Standard Wagon, and was nationalised in 1975. In fiscal 2006, the company reported aggregated revenues of Rs 13,727 lakh (US$ 318.6 million).