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DLF’s rental unit gets bids from Blackstone and others; Panel to look into Mauritius tax treaty concerns

14 June, 2016

Private equity giant Blackstone Group, GIC of Singapore and Brookfield Asset Management have made separate bids of slightly above $1 billion to acquire a 40% stake in DLF’s commercial property unit that owns rent-yielding assets, according to a report.

A consortium of Qatar and Abu Dhabi sovereign funds, along with Kotak Realty Fund, is being seen as the fourth bidder in the process, The Times of India reported citing sources privy to the development. The deadline to file the bids was last weekend.

DLF is looking to offload a significant minority interest in DLF Cyber City Developers, which owns the leased commercial assets including office and retail space portfolio in the National Capital Region and in Kolkata.

The bids are essentially for a portfolio of around 25 million sq ft of tenanted space, mostly office buildings.The deal excludes some retail assets like the Mall of India in Noida and DLF Place in Saket, and the office buildings that house DLF corporate headquarters.

Govt forms panel to look into India-Mauritius tax treaty concerns

The government has formed a working group to examine the consequences of the recent changes made to the India-Mauritius double taxation avoidance agreement and related issues, Business Standard reported.

The group will be headed by a joint secretary-level official at the income tax department and have departmental officers, representatives of the Securities and Exchange Board of India, custodians, brokerage firms and fund managers as its members. The group is expected to submit its report to the Central Board of Direct Taxes within three months.

India and Mauritius amended the three-decade-old treaty last month, after over a decade of negotiations, in a bid to plug some loopholes. As per the changes, India can tax capital gains on investments made after 1 April 2017.

Sterlite Power to raise capital through InvITs

Sterlite Power Grid Ventures Ltd, the power transmission arm of Pune-based Sterlite Technologies, has applied to raise capital through Infrastructure Investment Trusts (InvITs), a move that would make it the first power infrastructure company to do so.

The company is likely to raise around Rs 2,500 crore-3,000 crore, Business Standard reported citing sources privy to the development. InvITs are allowed to invest in infrastructure projects directly or through a Special Purpose Vehicle.

Sterlite will utilise the capital partly to reinvest in existing projects, in upcoming ones and also to pare its debt, the report said. The cumulative debt is Rs 3,500 crore, which includes Rs 925 crore of non-convertible debentures that it issued in January.

K Raheja Corp to sell stake in commercial realty unit

Mumbai-based developer K Raheja Corp has decided to sell a minority stake in its income-yielding commercial real estate unit and has mandated JM Financial and Morgan Stanley for a share sale process.

The Chandru Raheja-led company is likely to raise up to $500 million by selling around 25% stake, The Times of India reported citing people familiar with the matter.

K Raheja Corp is among the top three owners of tenanted offices – after DLF and Blackstone – with 20 million sq ft in Mumbai, Pune and Hyderabad. The potential transaction could value the office space portfolio, now branded Mindspace, at around $2 billion, the report said.

Govt in talks to sell Nokia’s Chennai unit to Foxconn

Indian government representatives and Tamil Nadu government officials have held talks with Taiwanese contract manufacturer Foxconn’s founder Terry Gau about a possible sale of Nokia’s Chennai factory, The Economic Times reportedciting people aware of the development.

The move is being seen as aimed at reviving operations at the 212-acre facility on the outskirts of Chennai, the report said. 

The Chennai factory, at its peak, produced 15 million handsets a month and directly employed 12,000 staff. It was left out of a deal by Microsoft to buy Nokia’s devices and services unit owing to an estimated Rs 21,000-crore tax demand on Nokia.

The tax authorities froze the asset in September 2013. Following the Supreme Court’s dismissal of Nokia’s appeal to lift the freeze in March 2014, the factory was excluded from the Microsoft deal and was finally shuttered in October 2014.

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DLF’s rental unit gets bids from Blackstone and others; Panel to look into Mauritius tax treaty concerns

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