Prestige Shantiniketan was a landmark project in Bangalore and due to these two accidents, I fear that this can also be one of the infamous project in Bangalore. The biggest challenge for Prestige Group will be
1) To settle those legal cases and resume the construction.
2) To keep disgruntled owners of the apartment pleased. With time they may calm down.
3) To keep worried investors at calm will be an uphill task considering the fact that there were investors with deep pockets and people with power.
4) To rebuild the deteriorating Prestige brand.
5) To boost morale of construction workers and their employees. With employee getting arrested and media bashing the Prestige it will be daunting task to keep everyone in high spirit.
I won't be surprised to see Prestige going Lehman way if investors starts pulling back their investment, if banks stops giving further loans and the project construction gets stopped for few months. As it's not a public listed company so their balance sheet health conditions is unknown. Accidents coupled with harsh credit crisis in the market, Prestige can have a liquidity crunch.
It will be interesting to watch how Prestige will be able to wriggle out of this mess. Unfortunately with the current issues apartment owners fate will keep on hanging.
I would like to express my solidarity for the constructions workers who got killed and injured.
Read more news from Mid-Day
After the Prestige Shantiniketan roof collapsed, investors want their money back.
Sources in the group said, after Shantiniketan came crashing down last month, investors in the project, most of them from Dubai, were opting out even though the management was desperately trying to hold them back.
"Apart from the slump in the realty market, this new development has put Prestige under great stress," said a source.
However, Irfan Razack, chairman and managing director of Prestige, said: "The Shantiniketan accident was an unfortunate development. By God's grace, we are marching ahead leaving it behind. Nobody is asking for money back from us. All the customers are with us at this difficult time."
What happened
Tower 'C' of Prestige Shanthiniketan, a township project on a 105-acre campus in Whitefield, crashed on October 23. With the roof of the fifteenth floor leaning, all the fourteen floors of a portion of the tower collapsed.
Sources say there were 17 Dubai-based investors for the project with a major stake an average investment of Rs 30 crore from each. The total cost of the project was estimated around Rs 500 crore and the group was not in a position to return the money owing to the liquidity crunch.
The management has been holding investors' meetings several times but has failed to convince them to stay on so far.
"The options they put before us were not workable," said an investor requesting anonymity. "We will not accept anything other than our money back."
The group is understood to have offered the investors land at Chikkaballapur near the international airport, but the offer was rejected as the land was under litigation.
The market value of the land is around Rs 1.20 crore per acre, but the group is said to have offered it to investors at the rate of Rs 40 lakh per acre. Investors have not agreed.
"Knowing it is disputed property, how can we buy it?" asked the investor. "We have insisted that our money must be returned. Now, they have to take a decision."
Banks including HSBC and ICICI who had paid advance for office space also want their money back.
Zafaer Sait, vice-president, business development, Prestige, denied the news saying it was a rumour. "Like others in the industry, Prestige is also facing problems. I don't think the Shantiniketan case has any impact on our business."
Click here to read all news on Prestige Shantiniketan
1) To settle those legal cases and resume the construction.
2) To keep disgruntled owners of the apartment pleased. With time they may calm down.
3) To keep worried investors at calm will be an uphill task considering the fact that there were investors with deep pockets and people with power.
4) To rebuild the deteriorating Prestige brand.
5) To boost morale of construction workers and their employees. With employee getting arrested and media bashing the Prestige it will be daunting task to keep everyone in high spirit.
I won't be surprised to see Prestige going Lehman way if investors starts pulling back their investment, if banks stops giving further loans and the project construction gets stopped for few months. As it's not a public listed company so their balance sheet health conditions is unknown. Accidents coupled with harsh credit crisis in the market, Prestige can have a liquidity crunch.
It will be interesting to watch how Prestige will be able to wriggle out of this mess. Unfortunately with the current issues apartment owners fate will keep on hanging.
I would like to express my solidarity for the constructions workers who got killed and injured.
Read more news from Mid-Day
After the Prestige Shantiniketan roof collapsed, investors want their money back.
Sources in the group said, after Shantiniketan came crashing down last month, investors in the project, most of them from Dubai, were opting out even though the management was desperately trying to hold them back.
"Apart from the slump in the realty market, this new development has put Prestige under great stress," said a source.
However, Irfan Razack, chairman and managing director of Prestige, said: "The Shantiniketan accident was an unfortunate development. By God's grace, we are marching ahead leaving it behind. Nobody is asking for money back from us. All the customers are with us at this difficult time."
What happened
Tower 'C' of Prestige Shanthiniketan, a township project on a 105-acre campus in Whitefield, crashed on October 23. With the roof of the fifteenth floor leaning, all the fourteen floors of a portion of the tower collapsed.
Sources say there were 17 Dubai-based investors for the project with a major stake an average investment of Rs 30 crore from each. The total cost of the project was estimated around Rs 500 crore and the group was not in a position to return the money owing to the liquidity crunch.
The management has been holding investors' meetings several times but has failed to convince them to stay on so far.
"The options they put before us were not workable," said an investor requesting anonymity. "We will not accept anything other than our money back."
The group is understood to have offered the investors land at Chikkaballapur near the international airport, but the offer was rejected as the land was under litigation.
The market value of the land is around Rs 1.20 crore per acre, but the group is said to have offered it to investors at the rate of Rs 40 lakh per acre. Investors have not agreed.
"Knowing it is disputed property, how can we buy it?" asked the investor. "We have insisted that our money must be returned. Now, they have to take a decision."
Banks including HSBC and ICICI who had paid advance for office space also want their money back.
Zafaer Sait, vice-president, business development, Prestige, denied the news saying it was a rumour. "Like others in the industry, Prestige is also facing problems. I don't think the Shantiniketan case has any impact on our business."
Click here to read all news on Prestige Shantiniketan
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The above news is 100% true. we have also invested
ReplyDeletecrores of money in shanthiniketan commercial project.
The company is neither completing the project nor giving any interest for the money invested.please give suggestions to get out of this bloody project.