TPG Capital joins Blackstone in HDFC plans special race to buy stake in Jet Privilege situations fund for stressed projects
MUMBAI: US private equity (PE) giant TPG Capital will lock horns with native rival Blackstone Group LP to acquire a significant stake in the frequent-flier loyalty programme of Jet Airways (India) Ltd, said two people directly aware of the matter.
Jet Airways, which owns 49.9% stake in Jet Privilege Pvt. Ltd (JPPL), has appointed Morgan Stanley to advise on a potential deal that could value the privately-held company at $400 million, the people cited above told
on condition of anonymity. “Discussions with TPG have gained momentum in the past few weeks even as Jet Airways continues to engage with Blackstone for the transaction,” the first person cited above said.
Earlier, had reported on August 16 that global private equity giant Blackstone group has expressed interest in a deal that could value JPPL at about ₹3,000 crore ($429 million) to ₹4,000 crore. Jet Airways had however denied the development saying that reports on any move to monetize its investment in the loyalty programme were “purely speculative.
Emails sent to Jet Airways, Morgan Stanley and Blackstone did not elicit a response until press, while spokesperson of TPG declined requests for comment.
JPPL which houses the frequent flyer programme of Jet Airways was incorporated in 2012 as a wholly owned subsidiary of Jet Airways but was hived off as an independent entity in 2014 after Etihad Airways picked up 50.1% stake in the firm for $ 150 million valuing the firm at around $300 million. Etihad’s investment in JPPL was a part of its overall $600 million investment in the Jet Airways announced in April 2013. BENGALURU: Housing Development Finance Corp. Ltd (HDFC), India’s largest mortgage lender, is setting up a new venture to raise capital for a special situations fund that will invest in stressed projects in real estate as distress deepens in the property sector.
HDFC, which will be a sponsor to the fund, is in talks with investors to raise capital through the alternative investment fund (AIF) route. Kaizad Hazari has been appointed as chief executive officer-designate for the venture.
“The objective is to find opportunities in real estate stressed assets, and then to take over these projects and turn them around,” said Keki Mistry, vicechairman and chief executive of HDFC told
Mistry didn’t disclose the likely size of the fund.
The real estate sector is an area of core competence for HDFC and its distressed-themed fund comes at a time when the residential sector, in particular, has undergone a nearly five-year long slowdown. Moreover, a stringent regulatory regime under the real estate regulatory authority (RERA) and the aftershocks of the goods and services tax (GST), have led to a prolonged slowdown, increasing debt at developers and unsold inventory with several projects across cities being either stuck or delayed.
HDFC is scanning the market to identify projects that are stuck, and where it can help in completing them and offer possession to retail investors and buyers. As an investor, the new fund can either continue with the existing project developer or bring in a new developer.
“We will look at the top 6-8 cities and evaluate opportunities across segments, like residential, commercial office and hospitality,” said Hazari.
HDFC currently handles real estate i nvestment t hrough HDFC Capital Advisors Ltd which raised $550 million in December, in an initial closure of its second affordable housing fund. It also has HDFC Property Fund, which is planning a $500 million overseas fund.
HDFC is not the only one. Other investors are also eyeing similar opportunities.
ASK Property Investment Advisors has its ₹900 crore ASK Real Estate Special Situations Fund for incomplete housing projects either due to sluggish demand or the developer’s inability to complete the project due to a lack of capital.