Bangalore-based realtor Embassy Property looking to raise up to $150M from Deutsche Bank
Bangalore-based real estate developer Embassy Property Developments is close to raising $120-150 million from Deutsche Bank, sources privy to the development told VCCircle. The privately held firm, which sought to go public three years ago but later decided against it, struck a slew of large deals (some of which in partnership with Blackstone) over the last couple of years.
A senior industry executive privy to the development who did not wish to be identified, said, “They are raising funds through an issue of non-convertible debentures (NCDs) for a clutch of projects. The term sheet would be signed soon.”
An email query sent to a Deutsche Bank spokesperson did not elicit any response while an Embassy Property spokesperson declined to comment on the development.
In January, The Economic Times had reported that Embassy Property was trying to raise Rs 500 crore (or a shade less than $100 million) from JP Morgan for its projects. However, the deal has not materialised.
For Deutsche Bank, this would come among other impending deals marking its comeback of sorts to the Indian realty space. The German bank had previously bet a large sum on Lodha Developers’ landmark projects in Mumbai. The repayment, which was due on December 2010, got delayed and eventually Deutsche Bank exited for Rs 2,542 crore ($508 million back then), pocketing returns of 55 per cent for its over four-year-old investment. It had invested Rs 1,640 crore by subscribing to optionally convertible debentures (OCDs) of Lodha’s subsidiary Cowtown Land Development Ltd.
Recently, Deutsche Bank was also in the race for a transaction with Chennai-based VGN Developers which fell through as Clearwater Capital and Piramal NBFC stepped in to strike the deal.
It is understood that the bank wants to sign cheques in the realty investment segment by subscribing to NCDs and other debt structures.
Embassy Property is developing residential projects across Bangalore, including a 14.5 acre development in Bellary road, a 7.93 acre property off Old Airport Road, Embassy Oasis near MG Road, another 51 acre development in Bellary Road called Embassy Boulevard, and a 14 acre project in the outer ring road. It also has a 25 acre project in Chennai.
Under its commercial projects, it is developing nine projects spread across Bangalore and Pune. Last year, the developer received capital from Blackstone which took a 50 per cent stake in three commercial assets for $200 million.
Embassy Property, along with Blackstone and HDFC realty fund, struck the biggest deal earlier this year by buying out Vrindavan Tech Village on Outer Ring Road in Bangalore for Rs 1,951 crore.
Embassy Property has an extensive land bank across the country and developed close to 30 million square feet of prime commercial, residential and retail space as of March 31, 2012. It also has operations in Malaysia and Serbia.
(Edited by Joby Puthuparampil Johnson)