Mumbai-based developer Indiabulls Real Estate Ltd has decided to take its Singapore-listed Indiabulls Properties Investment Trust (IPIT) private by buying out investors and public shareholders.
The company has a 54.95% stake in the trust while the Farallon Group and the public hold 42.67% and 2.38%, respectively.
Brenformexa Ltd, a wholly-owned subsidiary of Indiabulls Real Estate, has made an unconditional cash offer to buy out Farallon Group at S$0.90, or $0.66, per unit. Farallon will be paid $214 million in three tranches.
VCCircle could not immediately ascertain the investment Farallon made in the trust.
“As per the relevant Singapore rules, the company will be allowed to mandatorily acquire all the remaining units held by its public unit-holders who have not accepted the offer, who will be paid the full S$ 0.90 in cash up front,” the statement said.
Following this, IPIT will become a fully-owned subsidiary of Indiabulls Real Estate and get delisted from the Singapore stock exchange, SGX-ST.
According to a disclosure filing by Indiabulls, the Singapore Exchange suspended trading in units of IPIT in June 2016 after public shareholding in the company dropped below the mandated 10%. Grapene Ltd, an indirect wholly-owned subsidiary of Indiabulls, had acquired 54.95% stake in IPIT, following which public shareholding fell to 2.38%.
Talking about the rationale behind the delisting, the company said the move will provide the company the flexibility to manage and develop existing investments even as it explores other opportunities. It also said that the offer price represents a premium of 259.7%, giving unit-holders an opportunity for a clean cash exit.
The main objectives of lPlT are to achieve competitive long-term returns by investing in income-producing properties globally; acquiring and developing properties; and either holding or selling all or a portion of developed properties upon completion.
An email query sent to an Indiabulls spokesperson did not elicit a response till the time of publishing this report.
The Indiabulls stock closed at Rs 222.15 apiece on the BSE on Thursday, up 3.11%, in a strong Mumbai market.