Mumbai's iconic textile company, The Bombay Dyeing and Manufacturing Company Ltd (BDMC), on Wednesday (September 13) said the company has approved the proposal to monetise a prime land parcel in Worli, Mumbai.

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In a board meeting held on September 13, the board of directors of BDMC gave the green light to a proposal that involves selling approximately 22 acres of land, along with the associated floor space index (FSI), to Goisu Realty Private Ltd, a subsidiary of Sumitomo Realty & Development Company Ltd.

Upon approval of shareholders, BDMC will receive about Rs 4,675 crore from the buyer for phase one. The balance amount of about Rs 525 crore will be given upon completion of certain conditions by BDMC and execution and consummation of the definitive agreements thereto for phase two.

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Nusli Wadia, Chairman of BDMC, said, "I am happy to inform that BDMC is entering into agreements with Sumitomo group for the sale of about 22 acres of land (along with the associated FSI) in Worli, Mumbai, for a total consideration of about Rs 5,200 crore."

On completion of the proposed transaction, BDMC will be able to record a pre-tax profit in excess of Rs 4,300 crore in the wake of this transaction and report a strong positive net worth

Also, the company will neutralise all its borrowings, thereby saving interest costs and releasing the charge on encumbered assets, pay dividends in the future, and have a strong treasury balance to fund future realty projects.

Shares of Bombay Dyeing and Manufacturing Company Ltd ended at Rs 140.45, up by Rs 9.10, or 6.93 percent, on the BSE.

(Edited by : Shoma Bhattacharjee)