The cash-strapped Jet Airways had purchased the plot - located next to the Mumbai Cricket Club — in an auction conducted by the Mumbai Metropolitan Region Development Authority (MMRDA) in 2006, but has been unable to develop it since.
Now, taking advantage of a window of opportunity provided by the MMRDA rules, Jet is close to accepting an offer from Godrej Properties which could fetch it- a Rs450 crore compensation; 2.5 lakh sq ft built-up space; and 10% profit in the new development. The negotiations are on in full swing as the company intends to conclude the deal by the financial year ending 2009-2010-which means it has just 24 days to go. If the deal goes through, it will signal Godrej’s entry into its first commercial venture.
Godrej Properties refused to comment on the deal. Prasun Sengupta, vice president (corporate administration) of Jet Airways, said the airline had not reached any understanding with Godrej. “We are in talks with several interested parties,’’ said Sengupta.
The airline has taken the joint venture route as, according to rules framed by the MMRDA for BKC plots, the owner cannot sell the plot to a third party for five years after the commercial building has been constructed. MMRDA rules also stipulate that Jet, who had bid for the plot in the end-user category, has to occupy at least 60% space of the built-up area, which comes to 2 lakh sq ft.
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