Mumbai-based developer Indiabulls Real Estate Ltd said on Wednesday it has bought back the stake of the US-based private equity firm Farallon Capital Management in Indiabulls Infrastructure Pvt Ltd (IIPL) after a court ruling.
IIPL was formed as a joint venture between Indiabulls Real Estate and FIM Ltd, a fund managed by Farallon Capital. The developer owned about 26% of the joint venture while FIM held the remaining.
In a stock-exchange filing, Indiabulls said it has now acquired FIM’s entire stake in IIPL for Rs 382 crore ($56 million).
IIPL, through wholly owned unit Kenneth Builders & Developers Pvt Ltd, had planned to construct a residential project allotted by the Delhi Development Authority (DDA) in the national capital in 2006. Kenneth Builders deposited Rs 450 crore with the DDA the same year for the land in Delhi’s Tehkhand area.
The project ran into trouble soon after when the Delhi government’s forest department raised objections on the grounds that the land was part of a protected forest area where no construction could be allowed.
The issue took nearly a decade to be finally resolved when the Supreme Court of India, in June last year, ruled that the project could not be constructed and that the DDA must refund Kenneth Builders the amount it had deposited along with interest. The DDA has now refunded Rs 701 crore to the company, Indiabulls said in the filing.
Shares of Indiabulls Real Estate gained 4.8% to Rs 83 apiece on the BSE in a flat Mumbai market.
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