India’s leading real estate developer, Prestige Estates Projects Limited (“Company”) has completed phase 1 of proposed transaction with Blackstone Group.
The enterprise value forming part of phase 1 is approximately Rs 7467 crore out of the total enterprise value of approximately Rs 9160 cr.
The overall transaction (Phase1&2) include-100% stake sale in six completed office projects (include a hotel) and 50% stake sale in four under construction projects. It also includes 85% stake sale in nine Shopping malls.
“We believe that this transaction will further strengthen our foundation and help us in gearing up for the next level of growth. This transaction will also aid us in building long-term strategic partnership with Blackstone Group and leverage the respective strengths of both to create value for the stakeholders. With our unparalleled execution track record, Balanced portfolio across segments and geographies and deep management expertise, we are uniquely positioned to capture opportunities for growth and gain from the accelerated consolidation that is taking place in the real estate industry. We have a strong development pipeline of about 43 mnsft office and retail portfolio in the key locations across the cities and in the next 4-5 years it is projected to yield rentals of over INR 30,000 mn pa – growth close to 10x of our post-deal rental portfolio of about INR 3,000 mn,” Irfan Razack, Chairman, Prestige Group said.
The Phase 1 of the transaction includes sale of twelve assets/undertakings comprising of completed retail, office and hotel assets. Phase 2 of the transaction is expected to get completed by the end of next quarter, the company said.
“This marks the beginning of the next chapter of our journey. This transaction is well aligned with our capital recycling strategy coupled with financial and strategic benefits. Financially, it provides us with the best opportunity to deleverage and further strengthen the balance sheet. Our consolidated net debt as on 31st December, 2020 was Rs 8464.5 cr and current transaction value itself is Rs 7467 cr. Strategically, this will aid in releasing significant management bandwidth to focus on new growth areas and increasing our market share across key cities and business segments. Proceeds from the transaction will be used to repay debt, for growth and for construction of on-going projects,” Venkat K Narayana, Chief Executive Officer, Prestige Group said.
Prestige Group has diversified business model across Residential, Office, Retail, and Hospitality segments with operations in 12 key locations in India. The Group has completed 249 award projects with developable area of 135 mn sft. It has 47 ongoing projects across segments, with total developable area of 59 mn sft. Further, it has 62 mn sft under planning and holds a land bank with potential developable area of over 27 mn sft.
The company has been graded CRISIL DA1 by CRISIL and also enjoys credit rating of ICRA A+.
Source: Economic Times