Deutsche Bank monetises land worth Rs 160 cr to redeem BPL debt

To get back its debt from BPL Limited, Deutsche Bank has monetised land assets worth Rs 158 crore – pledged to them from BPL as part of the Rs 400 crore debt restructuring process – during the fourth quarter of 2010-11.

According to industry insiders, Deutsche Bank has monetised around 300 acres of land during the past year and has another 50 acres for monetising.

For the final settlement, BPL has to fork out another Rs 118 crore. Industry analysts said the remaining land bank might be able to fetch the amount. “It is all part of what that real estate fetches at the point of sale and one can never be sure,” said an auditor.

As part of this land monetisation, BPL Ltd has posted a notional net profit of Rs 86.5 crore for the fourth quarter of FY11, compared to Rs 2 crore net profit posted during the corresponding quarter last year.

“As part of the accounting process, that amount reflects in BPL’s other income, but technically, it will go to Deutsche Bank. It will not even hit the bank accounts of BPL,” said an auditor.

During the past few years, BPL has been engaged in a protracted debt settlement process with Deutsche Bank after it consolidated the debt. BPL after exiting from the consumer electronics business, is now focussing its resources on medical equipment and has been making a decent progress on that front. Sales during the fourth quarter were close to Rs 26 crore, a marginal rise from Rs 23 crore during the year-ago period. Sales for FY11 were at Rs 90 crore, up 11 per cent over FY10.

Industry insiders said BPL is hoping to complete the debt settlement process with Deutsche Bank in the current financial year. Then the company will be able to focus on business expansion. For its medical equipment business, the company has made inroads in the tertiary healthcare sector in India and has been in technical collaboration with US-based Welch Allyn.