BANGALORE: Private equity giant Blackstone Group and Standard Chartered Bank will together extend Rs 1,150 crore ($184 million) funding to Embassy Office Parks to help the latter buy 60% stake in Bangalore IT special economic zone Vrindavan Tech Village (VTV), said people directly familiar with the matter.
Blackstone will invest Rs 500 crore ($80 million) afresh in Embassy Office Parks, which it equally owns with developer Embassy Group, through convertible instruments. Standard Chartered will extend Rs 650 crore ($105 million) multi-year loan to clinch the majority stake acquisition in the 2.1 million sqft SEZ, leased to clients such as Cisco, Sony and Nokia.
Speaking to TOI, Jitu Virwani, CMD, Embassy Group said, "Standard Chartered is taking over the existing debt on the project of Rs 650 crore, while Blackstone is paying for their 50% share of 1.9 million sqft of built up office space and 30 acres of land." Blackstone declined to comment, when contacted.VTV has potential to develop additional 10 million sqft on a 108 acre land in the IT suburbs of Bangalore.
The fund raising from Blackstone and Standard Chartered is expected to close by January-end, sources added. JP Morgan, HDFC and Indiabulls too were in the fray to extend loan financing, before Embassy decided to go with Standard Chartered. The VTV deal, for which an initial agreement was signed last year, values the
SEZ at around Rs 2,000 crore, making it one of the largest office space acquisitions till date.
With this, the Bangalore-based Embassy Office Parks owns leased office space of more than over 15 million sqft. It also boosts Blackstone's overall portfolio of India's rent yielding commercial assets to more than 23 million. The PE major is set to move past DLF as India's largest landlord in the country's office space realty.
The latest Blackstone investment will be converted into equity in Embassy Office Parks once the acquired asset (VTV) undergoes a restructuring. Standard Chartered financing is extended directly to VTV.
New Delhi-based Garg family, which owns 80% stake in the park, will sell half the shareholding and retain the rest. Embassy had already mopped up 20% shares in VTV from other minority shareholders.
VTV deal will bolster Embassy Office Parks which has hired for Jones Lang LaSalle India head Mike Holland as CEO, setting in motion one of India's first real estate investment trusts (REITs) to be listed under regulations that are being framed currently.
Source : economictimes.indiatimes.com