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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Harsha raises fresh poser on Krrish deal

Harsha raises fresh poser on Krrish deal

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1Harsha raises fresh poser on Krrish deal Empty Harsha raises fresh poser on Krrish deal Mon Dec 17, 2012 1:22 am

sriranga

sriranga
Co-Admin
Asks if Indian firm will pay $ 500 m by 31 December as per revised agreement; warns failure must force Govt. to cancel lease

UNP MP Dr. Harsha de Silva yesterday raised a fresh poser on Krrish Group’s mega project, asking if the Indian firm would pay the $ 500 million by 31 December 2012 as per the revised agreement, adding that if not the Government should cancel the lease.

It was recently revealed in Parliament that the Government had entered into an agreement with a relatively unknown entity called Krrish Group of India to lease out the four-acre prime Transworks Square property for a period of 99 years for US$ 450 million or approximately Rs. 59 billion for a commercial development. According to a statement made by the Leader of the Opposition Ranil Wickremesinghe in Parliament in early November, even though Krrish Group was to have made a 20% down payment of the total sum within seven days of establishing the company in Sri Lanka and the remaining 80% on signing the lease agreement, these monies had not been deposited in any bank account of the Government.

In response to this statement, the Government announced that the agreement had been revised and that 10% had been paid on 14 September and that the remaining 90% would be paid within two weeks of signing the agreement on 15 December 2012.

In the meantime, the Government by Extraordinary Gazette 1778/3 dated 1 October 2012 notified that this project had been identified as a strategic development project and approved a large number of benefits including 25-year tax breaks on income, on dividends to shareholders, and on PAYE by employees.

Furthermore, it provided exemptions on withholding tax, VAT and PAL, and also from Customs duty.

Amidst allegations that the controversial Krrish Group had not yet completed a single such development project anywhere else in the world and that the project had been handed over to them on a non-transparent basis, the UNP MP observed that the company was advertising heavily to pre-sell apartments in the proposed three 90-storey towers at approximately Rs. 90 million per unit in order to raise funds locally for the lease payment as opposed to bringing the funds in as Foreign Direct Investment.

However, Janaki Siriwardhana, a Director of Krrish Group Sri Lanka, had announced recently that her company would invest over US$ 1,400 million (Rs. 182 billion), besides the US$ 450 million, in the next three to five years, including in a seven-star hotel they are negotiating to build and operate with the Ritz Carlton.

The UNP MP noted with increasing concern that no announcement has been made by the Government that it signed the lease agreement on 15 December and is expecting the full payment of US$ 450 million by 31 December as announced in Parliament on 24 November.

“We hope this agreement was signed and the Government will make the announcement today. However, if Krrish Group is either unable or unwilling to meet the conditions of the revised agreement, the Government must take immediate steps to cancel this agreement on underperformance as per the expropriation legislation enacted last year that was selectively applied only on certain identified investors,” UNP MP Dr. de Silva said.
http://www.ft.lk/2012/12/17/harsha-raises-fresh-poser-on-krrish-deal/

http://sharemarket-srilanka.blogspot.co.uk/

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Asks if Indian firm will pay $ 500 m by 31 December as per revised agreement; warns failure must force Govt. to cancel lease

UNP MP Dr. Harsha de Silva yesterday raised a fresh poser on Krrish Group’s mega project, asking if the Indian firm would pay the $ 500 million by 31 December 2012 as per the revised agreement, adding that if not the Government should cancel the lease.

It was recently revealed in Parliament that the Government had entered into an agreement with a relatively unknown entity called Krrish Group of India to lease out the four-acre prime Transworks Square property for a period of 99 years for US$ 450 million or approximately Rs. 59 billion for a commercial development.

Now whos right on this? scratch

As per above Harsha's statment, Krrish needs to pay $450million for the land.
But not too sure he realise the price of a perch?

(59,000,000,000/4*160)= that's staggering 93 million per perch...!!!!!! That cant be right even for a freehold property?

http://forum.srilankaequity.com/t24781-krrish-group-to-pay-govt-entire-us-450mn-by-end-dec?highlight=krrish

chamith

chamith
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
i thought the $500 mil is for the whole project. Land + building the 3 towers

Fresher


Moderator
Moderator
http://forum.srilankaequity.com/t24781-krrish-group-to-pay-govt-entire-us-450mn-by-end-dec?highlight=krrish

refer this. Again and again I'm getting confused.
I share Chamith's view. Since most reports state the lease is Rs. 5bn and the total cost of the project is $450mn

Unsure if the error is from Dr. Harsha himself (if not why wasn't he corrected), or by reporters, or in the earlier instance by the govt. minister himself.

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
npp wrote: Again and again I'm getting confused.
agree with you confused
as per Harsha, Why someone needs to pay 93 million per perch? !!!!

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@UKboy wrote:
npp wrote: Again and again I'm getting confused.
agree with you confused
as per Harsha, Why someone needs to pay 93 million per perch? !!!!
Agreement is for 99years.......So 93mn per perch may be correct.

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Whitebull wrote:
@UKboy wrote:
npp wrote: Again and again I'm getting confused.
agree with you confused
as per Harsha, Why someone needs to pay 93 million per perch? !!!!
Agreement is for 99years.......So 93mn per perch may be correct.

leasehold property value must be less than the freehold.

Average price of a buildable square feet in Manhattan (Heart of Newyork) is $500.

273 sq ft = 1 Perch

So price per perch in Manhattan is Rs 18 million.
Why Krrish pays 5 times higher price for a land in SL? Especially for a leasehold.? Rolling Eyes
Have they been mislead? Smile

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@UKboy wrote:
@Whitebull wrote:
@UKboy wrote:
npp wrote: Again and again I'm getting confused.
agree with you confused
as per Harsha, Why someone needs to pay 93 million per perch? !!!!
Agreement is for 99years.......So 93mn per perch may be correct.

leasehold property value must be less than the freehold.

Average price of a buildable square feet in Manhattan (Heart of Newyork) is $500.

273 sq ft = 1 Perch

So price per perch in Manhattan is Rs 18 million.
Why Krrish pays 5 times higher price for a land in SL? Especially for a leasehold.? Rolling Eyes
Have they been mislead? Smile

I do not think that method is applicable here.They are leasing this land for 99years.They can not buy this land because of government policy.During this period if they do wise investment they have potential to earn several times of $500mn.So I do not think they have been mislead. Wink

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Whitebull wrote:I do not think that method is applicable here.They are leasing this land for 99years.They can not buy this land because of government policy.During this period if they do wise investment they have potential to earn several times of $500mn.So I do not think they have been mislead.
Thanks for the info whitebull.
(Even though I'm surprised) If it's being leased for $500 million then that's a very good deal.

So I guess any government can accept a minor delay in payment.

However I must agree that this Harsha fella needs a break.

Fresher


Moderator
Moderator
@UKboy wrote:
@Whitebull wrote:I do not think that method is applicable here.They are leasing this land for 99years.They can not buy this land because of government policy.During this period if they do wise investment they have potential to earn several times of $500mn.So I do not think they have been mislead.
Thanks for the info whitebull.
(Even though I'm surprised) If it's being leased for $500 million then that's a very good deal.

So I guess any government can accept a minor delay in payment.

However I must agree that this Harsha fella needs a break.

I'm still under the impression that the lease is Rs. 5bn ($50mn)

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
i am with npp...........

Whole project worth estimation is $ 500 m. i am 99.9999% sure.

3 to 4 star SF construction cost is around rs. 10,000. For a basic property project it is around 5000 per Squire feet excluding the interior. with all these calculations $ 450m or Rs 58 b is exactly tally with these type of 3 tower very lavish property project plus the hotel. ( Avg. 80 floors ) This 7 star hotel is the problem. I have no clue about 7 star luxury hotel costs..................l

overall costing is correct with my very basic construction knowledge.
Rs. 10m also not a bargain price for this lease property since u get stuck when u want a bank loan..........

This 500m thing is the total $ inflow Gov. expects from the entire project.
This is wt i think. not the conclusion..................still the topic is open

sriranga

sriranga
Co-Admin
Delhi-based developer launches ‘Krrish Square’ project in Fort

By Bandula Sirimanna

Delhi-based developer Krrish group this week launched its US$460 million, 4-tower mixed development project in Colombo Fort.
The company will build four towers on a 10-floor podium block on a 4-acre land where Sri Lanka’s ‘Transworks House’, a British colonial era administrative building is located.

The project and its approval by the Cabinet were earlier exclusively reported in the Sunday Times. Chief Executive of the firm R Guptha told the Business Times that ‘Transworks House’ will be renovated to a modern luxury heritage hotel while preserving the building s heritage character intact.

The buildings are the main attraction with their overall beauty, along with the general landscape reflecting contemporary architecture. A leading French architect will handle the project, he said.

The tallest tower will have 85 floors, the second 80 and the other two – 55 floors each, in five million square feet of residential, commercial space and a hotel.

The company has leased a 4-acre land from Urban Development Authority for 99 years at Rs. 5 billion and 10 per cent of the total has been paid, he added.

This project will contribute to making Colombo an attractive destination for business and help attract trade and investment from Fortune 500 companies, he said.

Krrish Group is a diversified company whose activities span a wide range of sectors. One of their products is Cobra Beer, which is one of the fastest selling brands in the UK.
http://www.sundaytimes.lk/120930/business-times/delhi-based-developer-launches-krrish-square-project-in-fort-13923.html



Krrish project to boost foreign investments

By Azhar Razak Sunday, 30 September 2012

India’s Krrish group, which last week started marketing apartments for its US$ 460 million Krrish Square project at Transworks House in Fort, said it will aim to provide an infrastructure and ambience that will attract fortune 500 companies of the world to set up their business houses in Sri Lanka. According to the Krrish Group CEO R.P. Gupta, the project is expected to kick off construction within two months whilst the entire project will be completed in five years.

“We will aim to maintain the heritage character, whereby the existing Trans works heritage building will be renovated, house the most classic boutique luxury hotel featuring world class amenities for the guests”, Gupta said at the launching ceremony held last week.

Krrish Square, which will have a total built up area of five million square feet, will have the base of 10 floor podium for car parking, high end retail stores, shopping complexes etc. The four high rise towers will be built as a vertical city. One of the residential sky scrapper will have the height of podium (10 floors) plus 80 floors and the other two would be of podium plus 55 floors. The fourth tower will have the height of podium plus 85 floors and will house the seven-star hotel, commercial office spaces etc.

“Krrish square will have the total build up area of 5 Million sq. ft. Architecturally and technologically, it will be one of the best in this part of the world where the extent including Transworks building is 4 Acres”, Gupta further noted.A Krrish Square office has been opened on the 35th floor of the West Tower of World Trade Centre in Fort. Meanwhile, Krrish group, which has interests in alcohol and real estate is also planning a second US$ 100 million project in Hambantota, on a 24-acre property, chief executive R Guptha said.

Krrish Group is currently undertaking six different projects with a total built up area of 8.3 million square feet in Greater New Delhi area (Gurgaon) with a combined investment of US$ 400 million with receivables from those projects over the next five years amounting to over US$ 1.4 billion. Krrish Group said it boasts of an annual turnover of US$ 100 million.

The structures for the proposed Krrish Square have been designed by multi-award winning architecture firm C.P. Kukreja Associates whilst Wilson Associates, New York was announced as the interior partner and Dandi Living Ltd., London as landscape partner. The preservation and redevelopment of Transworks House will be undertaken by Paris based architect Edward Francois who shared some of his ideas. He was responsible for the makeover of the former Samaritaine Department Store building in Paris which is now home to the Louis Vuitton store among many others.
http://www.nation.lk/edition/business/item/10915-krrish-project-to-boost-foreign-investments.html

http://sharemarket-srilanka.blogspot.co.uk/

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Now topic is closed. Thanks sriranga.

hope every body is clear..............

Backstage

Backstage
Moderator
Moderator
Can somebody please inform Harsha. Laughing

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Thanks Sri.

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