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Virtuous Retail acquires three malls for $500 million

Virtuous Retail South Asia Pte. Ltd (VRSA), the retail development joint venture between alternative investment firm The Xander Group Inc. and Dutch pension fund APG, has acquired two existing malls and an upcoming retail development project for around $500 million in a bid to expand in India, Mint reported citing Siddharth Yog, its founder and chairman. With the latest acquisitions, Virtuous Retail will own and operate around 11 million sq.ft of retail space in India, in one of the four metros and in the 12 top cities in India. The Bengaluru-based firm operates four malls—Bengaluru, Surat, Mohali, and Chennai—besides two under-construction malls, one each in Delhi and Bengaluru, which are part of mixed-use developments. Virtuous Retail has been on an acquisition spree in the retail space over the past one year. Mint had reported on 29 August 2018, that it was in talks with Mumbai-based Omkar Realtors and Developers Ltd to acquire an upcoming mall for 2,300 crore.

Warburg Pincus exits 13 year old Lemon Tree Hotels investment

American private equity major Warburg Pincus has completely exited its 13 year old investment in hospitality comp Lemon Tree Hotels Ltd, Mint reported citing data from stock exchanges. Warburg sold its remaining 5.7% stake for 259.85 crore on Tuesday. Earlier, on 29 August, the PE firm had sold 6.7% stake for around Rs292.73 crore. Across the two trades Warburg fetched a total of Rs552.58 crore for its 12.4% stake. Warburg, which had invested approximately 300 crore in Lemon Tree in 2006 for around 24% stake in the company, had previously sold a 12% stake in the company through its IPO in early 2018. Warburg made 529 crore (approx $81.2 million) from the share sale through the IPO. Warburg's exit from Lemon Tree follows it's recent exit from general insurance company ICICI Lombard General Insurance Co Ltd. On 11 September, Warburg sold its remaining 2.7% stake in the general insurer for 1,378 crore (approximately $194.5 million).

Amazon’s plan to buy Reliance Retail stake stuck, co explores Max deal

Amazon’s plan to acquire stake in Reliance Retail has likely fallen through due to the high valuation of Mukesh Ambani’s retail business and the American ecommerce giant might have also demurred from such large investment in the Indian market after the government tightened regulations for foreign direct investment (FDI) in ecommerce, The Economic Times reported citing two senior industry executives who have business relationship with Amazon. Reliance has potentially valued the retail business at about 2.5 lakh crore to 3 lakh crore, and given that, Amazon’s initial plans to acquire a minority stake of 10-25% will mean a huge commitment. Amazon was in exploratory talks with Reliance Retail for last 3-4 months. Amazon has now started exploratory talks with Landmark group’s value fashion retail chain — Max — for acquiring a similar minority stake in it. Max had generated sales of about 3,500 crore in 2018-19 and value fashion retailers are typically valued at about 1.5 to 2 times of their revenue, though talk with Amazon is in an early stage right now. Amazon and Max have recently entered into trading arrangement where Max exclusively sells its products through Amazon’s online marketplace in India.

Oyo parent Oravel sets up two JVs with SoftBank’s SB Topaz

Oravel Stays, the parent company of hospitality chain Oyo Hotels & Homes, has set up two joint ventures (JV) in India, with an entity — SB Topaz — controlled by its largest backer SoftBank. Of the two JV entities — Mountainia Developers and Hospitality and MyPreferred Transformation and Hospitality — the former has been set up to acquire hotels-related real estate assets, ranging from land parcels to fully-developed properties, The Economic Times reported citing regulatory filings accessed by paper.vc. According to specific provision of the shareholder agreement dated April 17, Oyo and SoftBank are acting as joint venture partners to identify and acquire real estate assets in the hospitality sector. The agreement has clear provisions governing the sale of such assets as well, according to a research note from papervc. The second entity, MyPreferred Transformation and Hospitality is engaged in the business of renovation and refurbishment of hotels and other similar assets in India.

PTC eyes exit from non-core businesses to raise 2,000 crore

PTC India, the nation’s top power trading company, is in negotiations with potential suitors to sell two subsidiaries — non-bank lender PTC India Financial Services (PFS) and renewable energy firm PTC Energy, The Economic Times reported citing two people involved in the process. The move is aimed at raising 1,500- 2,000 crore besides exiting from non-core businesses to focus on its core business of power trading. The company is looking at selling the entire stake or at least a majority so as to maximise the valuation of its investment. PTC India is promoted by state-owned power sector players NTPC, Power Finance Corporation, NHPC and Power Grid Corporation of India. It owns a 65% stake in PFS, a listed company. PTC has sought shareholders’ approval for the share sale. Over the period, PTC has invested about 1,400 crore in these companies. PTC has sought shareholders’ approval to dilute up to a 26% stake in the financial services firm from the current 65%. Sources said dilution would depend upon the valuation.

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