Global investment major Actis and Mahindra Group’s real estate and infrastructure development arm Mahindra Lifespace Developers are together making a partial exit worth over Rs 120 crore from the latter’s subsidiary Mahindra Homes.
The developer has approached the National Company Law Tribunal (NCLT) with an application to reduce its equity share capital and provide exit to both the entities. The tribunal has admitted the petition and fixed it for hearing in March.
Mahindra Homes’ petition states that the company is generating steady cash flows and intends to continue its existing business operations. However, there are no immediate plans of expanding the business or initiating new ventures and therefore it has decided to repatriate surplus funds to shareholders.
Last year, Mahindra Lifespace Developers entered into a separate agreement to set up a joint platform for developing industrial and logistics real estate facilities across India.
The total investment in the logistics business over the initial years, including debt, is estimated to be Rs 2,200 crore. Actis will own a majority stake and Mahindra Lifespace Developers will have a significant minority stake.
According to the petition filed with the NCLT Mumbai bench, Mahindra Homes’ equity shareholders have passed a special resolution for reduction of the issued, subscribed and paid-up equity share capital from Rs 86.85 lakh to Rs 84.45 lakh. Both Actis and Mahindra Lifespace Developers will be paid out of the total cash of over Rs 125 crore.
The company is planning to reduce equity capital from 822,507 Series A equity shares, 23,043 Series B equity shares and 23,043 Series C equity shares to 822,507 Series A equity shares, 11,043 Series B equity shares, and 11,043 Series C equity shares, by cancelling and extinguishing more than half of Series B and Series C paid-up equity share capital.
Mahindra Lifespace Developers had incorporated the special purpose vehicle Mahindra Homes in June 2010 with an objective to develop residential projects in key markets across India.
The authorised equity share capital of the company stood at Rs 1.88 crore as on September end. The joint venture was formed with an economic interest of 50:50 between Mahindra and Actis.
The equal equity joint venture has so far completed and delivered a residential project in Bengaluru. In addition to this, the company is also working on the last phase of a residential project in Gurgaon and this is expected to be handed over within the next two years.
