Indiabulls realty co will merge with the B’luru embassy
Mumbai: Real Estate, the quoted arm of the Indiabulls group, and the important Bengaluru-based embassy, which is not listed, have agreed to merge through a share exchange agreement. After the merger, the important global private capital Blackstone will infuse $ 200 million into the entity. As part of the agreement, the merged entity will be controlled by and its promoter Jitu Virwani, while Sameer Gehlaut, the promoter of Indiabulls will become a passive shareholder. This will also mark the exit of the real estate sector.
Leaving the real estate sector was part of Indiabulls Group's plan when it sought to merge Lakshmi Vilas Bank with itself. The move was filed after the RBI rejected the green signal.
The current shareholders of Indiabulls Real Estate will obtain the scripts of the merged entity, which will also appear in the packages. The stock exchange relationship will be decided by independent appraisers and commercial bankers, the company said. The promoters and Blackstone will also have shares in the merged entity.
After the merger, the company will become the development arm of Embassy Office Park REIT, the first real estate investment trust in India that is a joint venture between Embassy Group and Blackstone. They will benefit from obtaining more developed assets, which increases the performance of the REIT, which is intended to provide compound returns to its unit holders through regular asset flow into the instrument, company sources said.
The Indiabulls group also has a strong relationship with Blackstone, which in the last two years has sold properties worth Rs 12,000 crore to the PE giant. Currently, Embassy Office Park REIT has a market capitalization of Rs 32,000 crore, while Indiabulls Real Estate is valued at Rs 4,865 crore. Since its inclusion in April last year, REIT of the Embassy has given a 30% return to its investors.
The founder and president of Indiabulls Group, Sameer Gehlaut, said the agreement, which marks the departure of the real estate development business group, agrees with the plan announced in June 2019. We will now focus completely on our business financial services. Gehlaut said. Indiabulls Real Estate will have a zero net debt at the time of the merger, the company said. After the agreement was announced, the price of Indiabulls Real Estate shares in the BSE closed 5% higher at Rs 107.