In August 2020, Embassy Group reached a definitive agreement to merge some of its residential and commercial projects with IBREL through a cashless merger program. Embassy Group will become the promoter of the merged entity.
Indiabulls Real Estate reduced its net debt by 54% to Rs 464 crore in the three months to June, compared to the March quarter. Additionally, the merger with Embassy Group is in the final stages of National Company Law Tribunal (NCLT) review, according to an investor presentation by Indiabulls Real Estate Ltd (IBREL).
In the investor presentation, IBREL said its net debt stood at Rs 464 crore at the end of the June quarter from Rs 1,005 crore as of March 31, 2022. Its gross debt fell to Rs 739 crore from Rs 1 310 crore. In April, IBREL had raised Rs 865 crore by issuing shares to institutional investors mainly for land acquisition and debt reduction.
Operationally, the company’s sales bookings fell to Rs 297 crore in the first quarter of this financial year from Rs 350 crore in the corresponding period of the previous year. In August 2020, Embassy Group reached a definitive agreement to merge some of its residential and commercial projects with IBREL through a cashless merger program. Embassy Group will become the promoter of the merged entity.
“Merger with Embassy in final stages of NCLT review, next hearing in Chandigarh is scheduled for September 8, 2022,” IBREL said in the presentation. The proposed merger of NAM Estates and Embassy One Commercial Property Developments into IBREL is underway, he added.
In February 2021, the Indian Competition Commission (ICC) had approved the proposed merger of Embassy Group companies – NAM Estates Pvt Ltd and Embassy One Commercial Property Developments Pvt Ltd – with IBREL. Embassy Group holds a stake of approximately 14% in IBREL and this share will increase to 45% after the merger of the assets of these two companies.
Post-merger, the combined entity will have 80.8 million square feet of launched and planned development potential. The merged entity will have around 30 projects. Under the terms of the agreement, IBREL shares are valued at Rs 92.5 per share.
IBREL, based in Mumbai, has a land bank of 3,280 acres, close to major metropolitan cities. It has a presence in six cities – Delhi-NCR, Mumbai Metropolitan Region (MMR), Jodhpur, Vadodara, Vizag and Indore. “Provides an option to monetize some land banks in non-core areas with limited potential and strengthen our presence in strategic locations. This allows us to develop projects to take advantage of potential opportunities, without needing to spend time locating and acquiring the land first. “, he added.
The company expects a net surplus of Rs 8,566 crore from its completed, ongoing and upcoming projects. It has an unsold inventory of Rs 12,736 crore and trade receivables against units already sold at Rs 3,030 crore, while the estimated cost to develop these projects stands at Rs 7,201 crore. Last week, the company announced a consolidated net loss of Rs 51.95 crore for the quarter ended June on lower revenues. Its net profit stood at Rs 4.76 crore in the prior year period.
Total revenue fell to Rs 164.18 crore in the April-June quarter from Rs 532.03 crore in the corresponding period a year earlier, according to a regulatory filing. Embassy Group, based in Bengaluru, is one of the leading players in commercial real estate. The group, along with Blackstone, launched India’s first Real Estate Investment Trust (REIT) in 2019, to raise Rs 4,750 crore through a public offering. He also owns WeWork India.