Real estate developer Ashwin Sheth Group has signed a deal to acquire a 5-acre plot that houses a movie studio owned by production house Cinevista at Mumbai’s Kanjur Marg suburb for more than Rs 260 crore, three people with direct knowledge of the matter said.
The two parties are in the process of registering the transaction, they said. “The initial memorandum of understanding has been signed last week and a certain part of the total consideration has already been paid. The transaction is expected to be registered anytime soon,” said one of the people.
The studio has mostly been known for shooting television serials. A few movies have also been made there. A part of the studio had caught fire in 2018. Cinevista has been reporting losses for the last four years. It has produced 66 shows for top TV channels and four films over the years. The company put the land for sale last year, stating that its cash flows were stretched and sustenance of debt levels was difficult.
“It is desirable and inevitable at this juncture that the company sell off whole or part of its property and reduce a substantial part of its debt,” it had said. For the year ended March 2020, it has reported a net loss of Rs 3.07 crore on a total income of Rs 22.65 crore.
Outstanding borrowings as of March 31, 2019, were Rs 40.86 crore. The 5-acre property was bought by the company in 2003 and was developed as a one-stop-shop for all shooting needs. In 2008, Cinevista had planned to convert 3 acres of the land into an IT-park at an investment of Rs 200 crore. The plan never took off.
The buyer, Ashwin Sheth Group, plans to develop a commercial office project there. Given the current floor space index norms, the plot has a total development potential of 1.3 million sq ft. Over the last few years, several studios in Mumbai have made way for property developments.
In 2018, the iconic RK Studio was sold by the Kapoor family to Godrej Properties that is developing a premium residential project on this 2.2-acre plot in the Chembur suburb of Mumbai. Another marquee studio, Kamalistan in the Jogeshwari suburb, had been sold a decade ago. Realty developers DB Realty and Bengaluru-based RMZ Corp are now jointly developing the property into a large commercial complex.