Indiabulls Real Estate will sell its London property to promoters for GBP 200 million (approximately Rs 1,800 crore) as part of its strategy to focus on its India business and cut debt.
The company's net debt stood at Rs 4,590 crore at the end of the fourth quarter of 2018-19 fiscal and the same would be reduced to Rs 3,000 crore after this proposed deal with promoters conclude.
"The company has decided to focus only on Mumbai and NCR markets, and hence has decided to divest Century Limited, the parent company that houses Hanover Square property, London," Mumbai-based Indiabulls Real Estate said in an analyst presentation.
"In light of continuing Brexit related issues and uncertainty around it, the London property market remains sluggish, so the promoter has undertaken to buy the parent company of London asset for GBP 200 million," it added.
The company had purchased this property for GBP 161.5 million, it said, and the current valuation has been pegged at GBP 189 million.
"Transaction is subject to approvals including the shareholders nod. Since it is a related party transaction, promoter will not be participating in the voting on this item," the company said.
Meanwhile, Indiabulls Real Estate posted a 95 per cent decline in its consolidated net profit at Rs 108.56 crore for the fourth quarter of the last fiscal as against Rs 2,181.13 crore in the year-ago period, according to a regulatory filing.
Total income also declined to Rs 2,040.61 crore in January-March quarter of 2018-19 financial year from Rs 3,244.25 crore in the corresponding period of the previous year.
During the full 2018-19 fiscal year, net profit declined to Rs 504 crore from Rs 2,372.84 crore in the previous year.
Total income rose to Rs 5,222.93 crore in the last fiscal from Rs 4,731.84 crore in the 2017-18 fiscal.