Home >Industry >Infrastructure >IBREL, Embassy sign definitive merger agreement
The combined listed entity shall be owned 44.9% by Embassy Group, 26.2% by the existing public and institutional shareholders, 19.1% by Blackgroup Group Lp and other Embassy institutional investors and 9.8% by existing IBREL promoter group. Blackstone-controlled entities have submitted a non-binding letter of intent (LOI) for participation in the proposed merger  Photo: Ramesh Pathania/Mint
The combined listed entity shall be owned 44.9% by Embassy Group, 26.2% by the existing public and institutional shareholders, 19.1% by Blackgroup Group Lp and other Embassy institutional investors and 9.8% by existing IBREL promoter group. Blackstone-controlled entities have submitted a non-binding letter of intent (LOI) for participation in the proposed merger Photo: Ramesh Pathania/Mint

IBREL, Embassy sign definitive merger agreement

The merged entity will be called Embassy Developments Ltd and will be co-headquartered in Mumbai and Bengaluru

Bengaluru: Real estate firms Indiabulls Real Estate Ltd (IBREL) and Embassy Group signed a definitive merger document late Tuesday evening, creating one of the largest real estate development platforms in the country.

The combined listed entity shall be owned 44.9% by Embassy Group, 26.2% by the existing public and institutional shareholders, 19.1% by Blackgroup Group Lp and other Embassy institutional investors and 9.8% by existing IBREL promoter group. Blackstone-controlled entities have submitted a non-binding letter of intent (LOI) for participation in the proposed merger.

The merged entity will be called Embassy Developments Ltd and will be co-headquartered in Mumbai and Bengaluru. The merger is expected to be completed by the second quarter of 2021-22.

Under the terms of the agreement, IBREL’s shares are being valued at Rs. 92.5 per share, a 25.7% premium to Tuesday’s closing price. The proposed merger will be achieved through a cashless scheme of amalgamation, were some private equity shareholders of Indiabulls Properties Pvt Ltd, which owns the Sky and Sky Forest residential projects shall swap their shares to the two Embassy subsidiaries and will eventually merge into IBREL by virtue of a National Company Law Tribunal (NCLT) approved scheme of arrangement.

With this, Sameer Gehlaut also formally exits as the promoter of IBREL.

“This merger marks the culmination of a journey I began almost 15 years ago to build a world class real estate company. I am excited to be handing over this platform to Embassy who have a proven track record, excellent execution capabilities and who have created a very strong brand and sponsored a successful listed REIT. I believe Embassy promoters are the right partner to make IBREL a larger, stronger and more balance platform in the future," said Gehlaut, non-executive chairman and founder, IBREL.

The merger entails IBREL, NAM Estates Pvt Ltd and Embassy One Commercial Property Developments Pvt Ltd (subsidiaries of Embassy Group) entering into a definitive merger documentation to amalgamate ongoing, completed and planned residential and commercial projects of Embassy’s subsidiaries.

Jitendra Virwani along with other promoter entities of NAM will become the new promoters of IBREL upon completion of merger and Gehlaut along with existing IBREL promoter group entities shall initiate the process of reclassification.

The combined IBREL entity will have 80.8 million sq ft of launched and planned development potential with pan-India presence across key markets including a strong base in commercial and residential market of Bengaluru, Embassy’s home turf.

Embassy chairman Jitendra Virwani said, “This integration provides scale to our two organizations and allows the stakeholders to capitalize on the opportunity created by the market consolidation and dislocations. The transaction also offers growth to the listed entity by combining a portfolio of well-located commercial projects across Mumbai, NCR and Bengaluru. I am excited about the possibilities of what this new combined platform can deliver."

The merger and reclassification of promoter shall be subject to approval of creditors and shareholders and regulatory authorities, including but not limited to CCI, stock exchanges, SEBI, NCLT and completion of other agreements integral to the merger.

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