The proposed scheme of amalgamation between Indiabulls Real Estate Ltd (IBREL), NAM Estates Pvt Ltd, and Embassy One Commercial Property Developments Private Limited which was filed with the CCI, Bombay Stock Exchange, National Stock Exchange, and the Securities and Exchange Board of India through the stock exchanges, has received all relevant regulatory approvals, the company said in a statement.
With all necessary corporate approvals on track, the merger process is now progressing in a timely manner, it said.
The resulting combined entity, Embassy Developments Limited, will hold both Embassy Group’s and IBREL’s ongoing, completed but unsold, and planned projects with 80.8 million sq ft of development potential, thus becoming one of the largest property development platforms in the country.
The combined entity shall benefit from a complementary pan-India presence across key markets including a strong presence in the commercial and residential markets of Bengaluru, Mumbai and NCR.
The merger shall provide diversification to IBREL shareholders through a balanced mix of residential and commercial development with visibility on near-term liquidity through sold receivables in excess of Rs 4,220 crore for the combined entity, the statement said.
Embassy Group is one of the largest developers in Bengaluru and holds 14 percent of IBREL. The Embassy Group entered into a definitive agreement with IBREL to merge its certain residential and commercial projects with IBREL through a cash-less scheme of amalgamation whereby Embassy Group shall become the promoters of the merged entity after the merger.
Further, as part of the merger process, certain entities controlled by BREP would also contribute certain identified residential projects to the merger through a share swap arrangement with Embassy Group entities, subject to the satisfaction of certain conditions.
The combined platform is expected to accelerate growth with IBREL recording one of the highest quarterly sales within the real estate industry at Rs. 9,905 million across all existing projects.
The combined listed entity shall be owned around 44.9 percent by Embassy Group, 26.2 percent by the existing public and institutional shareholders, 9.8 percent by existing IBREL Promoter Group and around 19.1 percent by BREP and other institutional investors, the statement said.
Individually, both IBREL and Embassy Group have shown exceptional resilience and turnaround from the pandemic-related market dislocations. IBREL recorded one of its highest quarterly sales figures in the past quarter at Rs. 9,905 million and dominated the Mumbai premium luxury market with its sales of iconic Indiabulls Blu Estate & Club residential towers in Worli. Embassy Group projects have shown a similar significant sale uptake in the same period within the Bengaluru market, it said.
“With the scheme having received necessary approvals from CCI, SEBI and the stock exchanges and definitive agreements entered with BREP and other institutional investors, the merger is now fully on track to fruition. We hope to complete the process by the third quarter of FY 22,” said Jitendra Virwani, Chairman & Founder of the Embassy Group.
“Embassy Group completing the execution of definitive agreements with institutional investors, including BREP, to participate in the merger and the scheme receiving required approvals in a timely manner are significant achievements. These institutional investors bring with them strong corporate governance standards and best practices,” said Mehul Johnson, joint managing director of IBREL.
IBREL as well as Embassy Group's arm NAM Estates and Embassy One Commercial Property Developments (NAM Opco) had entered into a definitive merger documentation to amalgamate ongoing, completed and planned residential and commercial projects of these two subsidiaries, a regulatory filing had said in August 2020.
Embassy Group already has around 14 percent stake in Mumbai-based IBREL and the same will increase to 45 percent after the merger.