Embassy Group secures ₹650-cr loan from Piramal Finance
BENGALURU: Piramal FinanceLtd, a subsidiary of Piramal Enterprises Ltd, hasgivenaloanof₹650 crore to Bengaluru- based Embassy Group.
The transaction has been structured like this: Embassy will in turn lend the money to its project partnerManyataPromoters Pvt Ltd and a shareholder in Embassy Manyata Tech Park, a prominent information technology (IT) special economic zone (SEZ) in Bengaluru.
Reddy Veeranna, chairman andmanagingdirector, Manyata Promoters, has26% shareholding intheITSEZwhiletheremaining is with Embassy Group and global investment firm Blackstone Group Lp.
“Currently, ManyataPromoters owesaround ₹500 crore (loan plus added interest) to Blackstone and Embassy. This money from Piramal will help in repaying the existing dues andsomeof it will beusedasgrowthcapital,” said a person directly familiar with the transaction, who didn’t wish to be named.
Embassy had filed an application for approvalfromtheSecurities andExchangeBoardofIndia (Sebi) in October 2016, for a real estate investmenttrust(Reit) listing. The proposed Reit portfolio, which includes Embassy Man- yata Tech Park along with other office parks, is more than 25 million sq.ft in size and valued at ₹20,000 crore.
“We are pleased to have extended our relationship with the EmbassyGroupandlookfor- wardtoalongandmutuallybeneficial association. I have always admired Jitu Virwani’s vision, track record andexecutioncapabilities and we are happy to providethemwithcustomisedfinancial solutions as they scale up their presence across both residential and commercial,” said Khushru Jijina, managing director, Piramal Finance.
Reddy Veeranna, chairman andmanagingdirector, Manyata Promoters, couldn’t be reached immediately for comment.
In early 2016, Manyata Promoters raised ₹725 crore from financial services firms IIFL Group and Edelweiss Group in a joint debttransaction. Edelweiss, astheseniorlender, loanedabout ₹450 crore, while the remaining ₹275 crore was given by IIFL.
Manyata Promoters, along with realty firm EmbassyGroup and investor Blackstone Group Lp, used the money for its new plotted developmentprojectsand to also repay loans of existing investors IFCI Ltd and Blackstone Group.
With the latest transaction, PiramalhaslentatotalofRs1,100 crore to Embassy Group and its partners across cities.
Earlier this year, Piramal FinancelentRs450croretoajoint venturebetweenEmbassyGroup andHyderabad’sPhoenixGroup, whichisdevelopingthreeSEZsin Hyderabad, Mint reported in April. Themoneyhasbeengiven in the form of construction finance to procureapprovalsand develop the SEZs, which will be built across 10 million sq. ft.
In the joint venturewithPhoenix EmbassyTechZonePvt. Ltd, Embassy is an equity partner, while Phoenixprovidestheland. Bothare involved in project construction.
EmbassyGroupisaprominent commercial office developer which has delivered around 30 million sq.ft of office space and 6 million sq.ft of premiumresidential developments. Thefirmhasa pipeline of around17millionsq.ft of commercial developments across Bengaluru, Hyderabad and Chennai.
“We are delighted to be working closely with a large diversified conglomerate like the PiramalGroupwhoisknownfor their structuring capabilities and quick turnaround time. We look forwardtoleveragingtheir capabilities as we partner with them on our growth capital requirements going forward,” said Jitu Virwani, chairman and managingdirector, EmbassyGroup, ina statement.
EMBASSY GROUP HAS DELIVERED 30 MILLION SQ FT OF OFFICE SPACE AND 6 MILLION SQ FT OF PREMIUM RESIDENTIAL DEVELOPMENTS
Developers are betting big on commercial office space these days