Eredene Capital PLC, a London-based investor in Indian infrastructure projects, is selling its stake in Mumbai-based Matheran Realty Pvt Ltd and its subsidiary Gopi Resorts Pvt Ltd to an undisclosed buyer. Matheran and Gopi are developing a low-cost housing project near Mumbai.
Eredene has signed an indicative term sheet with a potential cash purchaser of its stakes in both the firms for a single up-front payment of £7.2 million ($11 million or Rs 62.5 crore).
Eredene held 45 per cent stake in Matheran and after settlement of arbitration process with another shareholder, purchased an additional stake of 42 per cent for £2.6 million on July 3, 2012. The firm had also held 32.25 per cent stake in Matheran’s subsidiary Gopi Resorts. The remaining 13 per cent of Matheran is owned by a local property developer.
Gopi Resorts Pvt Ltd operates as a real estate development company. It is developing a large low-cost housing project on a greenfield site at Tanaji Malusare City near Mumbai, where sales deposits have been made on some 3,600 units.
It disclosed that including the deal early this year, the investments in Matheran and Gopi had a total carrying value of £13.8 million. “However, as the asset is now held for resale Eredene is required to reflect this investment at prudent fair value instead of consolidating it as a subsidiary in its interim results to 30 September 2012,” it disclosed.
Eredene focuses primarily on port services, logistics and warehousing and it trades on the Alternative Investment Market (AIM) of the London Stock Exchange. It has made investments of £44.6 million or $70 million in 11 projects in India.
“Eredene has previously announced that it would not make investments in new projects in India and that it would seek to realise its existing investments, and this term sheet is the first announceable step in that realisation programme. An eventual sale of its stake in Matheran and Gopi would also mean that Eredene's remaining core investments in India were all in port services, logistics and warehousing,” the company said.
In January this year, Eredene also made a partial exit from a container freight station (CFS) with returns of 5.9x. It had sold 10 per cent stake in Sattva CFS & Logistics Pvt Ltd for £1.1 million. Sattva CFS was Eredene’s first investment in the sector in 2007.
(Edited by Prem Udayabhanu)