Grapevine: GIC may buy into Taj GVK; First Degree to snap up two Essel financial firms
Photo Credit: Reuters

Singapore sovereign wealth fund GIC is in preliminary talks with GVK Group promoters to acquire their stake in Taj GVK Hotels and Resorts to consolidate its position in the Indian real estate and hospitality spaces, persons in the know told The Economic Times.

The Singaporean fund entered the fray after GVK’s stake-sale negotiations with Canadian billionaire Prem Watsa’s Fairfax Group, the persons added, asking not to be named. TAJ GVK has seven five-star properties across the country. GVK's Reddy family owns 49.47% stake in Taj GVK. 

“GVK is trying to reduce its debt burden and focus on its core infrastructure business. It is in the process of selling stake in Mumbai airport, like it did in Bengaluru a few years ago,” said one of the persons mentioned above. 

Indian Hotels Company Ltd, part of the Tata group, in May this year said that it was setting up a three-year, Rs 4,000 crore investment platform with GIC to acquire hotels in India.

Meanwhile, Singapore-based First Degree Global Asset Management has signed a pact to buy Essel Finance Business Loans and Essel Finance Home Loans for about Rs 150 crore (around $22 million at current exchange rate), two people in the know told The Economic Times.

A spokesperson for Essel Group, whose promoter Subhash Chandra owns the two firms, confirmed the development, the report said.

The deal will give a breather to Chandra, whose Essel Group is facing a severe debt crisis. Chandra had, last year, announced plans to sell half of the promoter’s then 41% stake in the company.

Essel Group has been trying to sell businesses and assets across various verticals including power transmission, roads, and renewables. It recently agreed to sell three of its road projects to Canada’s Caisse de dépôt et placement du Québec (CDPQ) for Rs 3,500 crore. It has also been in discussions with the Adani Group for its solar parks and with Bharti Airtel consortium for merging their DTH businesses.

UPDATE: A previous version of this article said GIC is in talks to buy GVK Power's stake in Taj GVK. The Singapore fund is in talks with the promoters of GVK Group.

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