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Cornerstone has secured a INR 1,700 crore term sheet from Kotak Alternate Asset Managers via structured non-convertible debentures to fund Bengaluru-based projects. The capital will support six residential projects in East Bengaluru, two commercial ventures centrally, and land consolidation in the north. This funding move helps Cornerstone manage its ongoing dispute with L&T Finance, which had disbursed INR 835 crore of a INR 1,285 crore sanction, yet recovered around INR 1,400 crore. A recent ARCIL notice triggered legal action, with the Karnataka High Court granting interim relief. With court protection and negotiations underway, Cornerstone is progressing on title clearances and project execution.
Cornerstone recently secured a term sheet with Kotak Alternate Asset Managers for INR 1,700 crore through structured non convertible debentures, while monetising land holdings to fund its Bengaluru projects. The financing will support six residential developments in East Bengaluru, two commercial schemes in central areas, and additional land consolidation up north. Advertisement
The initiative marks a vital step in tackling Cornerstone's dispute with L&T Finance. Between 2017 and 2019, loans amounting to INR 1,285 crore were sanctioned, but only INR 835 crore was disbursed for two joint ventures with Brigade and Sobha and two internal projects. While L&T Finance and ARCIL labelled parts of the account as non performing, they've already recovered roughly INR 1,400 crore, exceeding sanctioned amounts.
Cornerstone argues that the lender's returns have outpaced the agreed 14.40 percent internal rate of return, reaching over 16 percent, making further recovery claims unjustified. Earlier this month, ARCIL issued a demand notice under the SARFAESI Act before the mandatory 60 day period elapsed, provoking legal proceedings. Cornerstone then approached the Karnataka High Court, which granted an interim stay and asked ARCIL to justify its cost awards for issuing the notice prematurely.
Thanks to the court's interim relief, Cornerstone now has breathing space to manage land registrations and title transfers necessary prerequisites before Kotak releases funds. Escrow accounts tied to L&T Finance continue receiving cash flows but remain unused amid ongoing negotiations.
Discussions are ongoing around a full settlement or restructuring, potentially with alternate collateral backing residual claims. A revised proposal is expected later this month, aiming to close the dispute and restore clear titles on affected assets. As legal proceedings proceed, Cornerstone is also moving ahead with reviving operations and project execution .
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