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Blackstone eyes Indiabulls’ rental arm; KKR, PremjiInvest bid for Vishal Mega Mart

21 February, 2018

Private equity giant Blackstone Group is in an advanced stage of discussions with Indiabulls Real Estate Ltd to buy a 49% stake in its office rental business for $600-650 million, a financial daily reported.

The Economic Times said the definitive agreement could be signed before 31 March.

The company’s 5.2 million sq ft ready-to-move office portfolio includes two Mumbai properties, Indiabulls Finance Centre and One Indiabulls Centre, besides One Indiabulls Park in Chennai. The annual rental income of the properties was at Rs 692 crore in 2016-17.

The company also has four office projects under-development aggregating to 3.15 million sq ft, according to its annual report.

Blackstone had entered the real estate sector in India in 2011, picking up two office parks – one each in Bengaluru and Pune. At present, it is the biggest owner of office properties in the country with over 30 million sq ft of completed and leased out assets. The PE firm is yet to record an exit from its real estate portfolio.

Vishal Mega Mart
Private equity giant KKR and PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, are in the race to pick up a 100% stake in Vishal Mega Mart, Mint reported.

The wholesale and retail chain, jointly owned by TPG and Shriram Group, had mandated Kotak Mahindra Capital to look for a buyer, the report said.

An unnamed person told Mint that the primary concern for the global PE funds was to find the right domestic partner to meet foreign direct investment norms.

Earlier this week, The Economic Times had reported that private equity major Carlyle Group, e-commerce major Flipkart and a consortium of Kedaara Capital and Partners Group were looking to acquire Vishal Mega Mart.

In September 2010, Vishal Retail had sold its retail, franchise and wholesale businesses to Chennai-based Shriram Group and TPG for Rs 70 crore.

Subsequently, two independent companies were spun off – while TPG Wholesale Pvt. Ltd took control of the wholesale and franchise arms, Airplaza Retail had taken over the retail arm.

Airplaza Retail is owned by Shriram Distribution Services Pvt. Ltd. TPG Wholesale was later renamed Vishal Mega Mart Pvt. Ltd.

Essar Steel
In another development, the bids submitted by ArcelorMittal and NuMetal Mauritius to acquire debt-laden Essar Steel Ltd may not have met the eligibility criteria under the insolvency and bankruptcy code.

Mint reported that the bids are under technical evaluation by law firm Cyril Amarchand Mangaldas and advisory firm Grant Thornton, and the committee of creditors will take a final decision based on their recommendations.

Essar Steel is undergoing a corporate insolvency resolution process initiated by the National Company Law Tribunal. It is one of the 12 large loan defaulters identified by the Reserve Bank of India under the IBC. It owes about Rs 45,000 crore to a consortium of lenders, the report added.

A recent amendment to the IBC has prevented promoters of assets, which were classified as non-performing for more than one year, from participation in the bidding of distressed assets put on sale by creditors.

Accordingly, while Essar Steel promoters, the Ruia family, maybe disqualified for holding a minority stake in NuMetal Mauritius, Arcelor Mittal’s bid came under the cloud given that it held a 29.05% stake in Uttam Galva Steels Ltd, which is also undergoing corporate insolvency proceedings. Though Arcelor Mittal had sold of its entire stake in debt-laden Uttam Galva earlier this month, it could still be considered a promoter entity of a stressed asset, according to the new norms.

Essar Steel
In another development, the bids submitted by ArcelorMittal and NuMetal Mauritius to acquire debt-laden Essar Steel Ltd may not have met the eligibility criteria under the insolvency and bankruptcy code.

Mint reported that the bids are under technical evaluation by law firm Cyril Amarchand Mangaldas and advisory firm Grant Thornton, and the committee of creditors will take a final decision based on their recommendations.

Essar Steel is undergoing a corporate insolvency resolution process initiated by the National Company Law Tribunal. It is one of the 12 large loan defaulters identified by the Reserve Bank of India under the IBC. It owes about Rs 45,000 crore to a consortium of lenders, the report added.

A recent amendment to the IBC has prevented promoters of assets, which were classified as non-performing for more than one year, from participation in the bidding of distressed assets put on sale by creditors.

Accordingly, while Essar Steel promoters, the Ruia family, maybe disqualified for holding a minority stake in NuMetal Mauritius, Arcelor Mittal’s bid came under the cloud given that it held a 29.05% stake in Uttam Galva Steels Ltd, which is also undergoing corporate insolvency proceedings. Though Arcelor Mittal had sold of its entire stake in debt-laden Uttam Galva earlier this month, it could still be considered a promoter entity of a stressed asset, according to the new norms.

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Blackstone eyes Indiabulls’ rental arm; KKR, PremjiInvest bid for Vishal Mega Mart

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