Indiabulls Real Estate Sells London Property To Promoters For £200 Million
Indiabulls Real Estate Ltd. has sold its property in London to a promoter group firm for £200 million, or about Rs 1,830 crore, as part of its plan to focus on the India business and cut debt.
At its annual general meeting on Sept. 28, the company's shareholders had approved a proposal to sell its London property to promoters for £200 million.
The "company's wholly owned subsidiary has divested its entire stake in Century Ltd., which indirectly owns Hanover Square property, London, to Clivedale Overseas Ltd., an entity owned by the promoters of the company,” Indiabulls Real Estate said in a filing to the Bombay Stock Exchange on Saturday.
With this, Century Ltd. ceases to be a subsidiary of the company.
Indiabulls Real Estate had previously disclosed its plans to focus on its India business and pare debt.
"In light of continuing Brexit-related issues and uncertainty around it, the London property market remains sluggish. The Great Britain Pound has also had a sustained depreciation from around the time of the Brexit referendum," the company said in the notice for the annual general meeting.
Indiabulls Real Estate had said that a further loan of about £133 million was needed to complete the ongoing construction at 22, Hanover Square property in London, but it would not like to incur this additional debt on its own balance sheet.
"To reduce debt and to focus more on Mumbai and NCR (National Capital Region) markets, the board had on earlier date authorised and approved divestment of the company's direct or indirect stake in the London property," it had said.
Promoters of the company came forward to acquire the London property for an aggregate consideration of £200 million against the cost of its acquisition at £161.5 million, Indiabulls Real Estate had said.
In June, Indiabulls Real Estate promoters sold 14 percent stake in the company via an open market transaction to Embassy Group for Rs 950 crore as part of its strategy to focus on financial services and exit the realty business.
Speculations were rife about the fate of the merger, announced in April this year, after RBI imposed restrictions on Lakshmi Vilas Bank due to its weak financial health.
To enter the banking space, Indiabulls Group has been selling various completed commercial properties to U.S.-based private equity firm Blackstone Group Plc.