The proposed merger between Embassy Group and Indiabulls Real Estate has entered the final lap as both the companies have now filed the requisite joint application with the jurisdictional bench of NCLT, for its approval to the scheme of merger.
The merger has received nods from the Competition Commission of India (CCI), the stock exchanges, and the Securities & Exchange Board of India (SEBI), Indiabulls Real Estate said in a regulatory notification.
Following the completion of the merger, the combined listed entity will be 44.9% owned by Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing IBREL promoter group and around 19.1% by the Blackstone Group and other Embassy institutional investors.
Embassy Group already holds 14% of listed Indiabulls Real Estate and once the merger gets concluded later this year it will become the promoter of the combined entity.
Both the property developers are looking to complete their proposed merger by December end, which marks Indiabulls Group’s complete exit from the real estate business. Last year, the developers had signed their definitive agreements for the merger and their respective boards had approved the corresponding share swap ratio.
The merger will be a cashless structure as Embassy subsidiaries–NAM Estates (NAM) and Embassy One Commercial Property Developments (NAM Opco)–will swap shares with Indiabulls Real Estate.
According to the terms approved by boards of both the merging entities, Indiabulls Real Estate shares were valued at Rs. 92.5 per share and shareholders of Embassy subsidiary NAM will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM. And NAM Opco shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares in NAM Opco.
The merger is expected to provide diversification to the listed company’s shareholders through a balanced mix of residential and commercial development with visibility on near term liquidity through sold receivables around Rs 4,000 crores for the combined entity.
