Bengaluru-based realty firm Embassy Group has proposed to merge around 11 real estate projects comprising nearly 62 million sq ft area with Indiabulls Real Estate (IBREL) and take control of the merged entity. Embassy Group already has around 14 per cent stake in Mumbai-based IBREL, which is part of the Indiabulls group. After this proposed merger plan gets concluded, Embassy Group will have a controlling stake and become promoter of the merged entity.
IBREL said a panel will be constituted to value the projects proposed to be merged and arrive at a swap ratio. In June 2019, the promoters of IBREL sold 14 per cent stake through open market transactions to Embassy Group for Rs 950 crore, as part of their strategy to focus on financial services and exit from realty business.
IBREL had in January this year announced its proposal of the merger of certain ongoing, completed and planned residential and commercial projects of Embassy Property Developments Pvt Ltd with itself. In a regulatory filing on Wednesday, IBREL said it has received the proposal from Embassy detailing their various assets for the merger of Embassy with itself.
"To give effect to the amalgamation, the board-constituted committee of the company is taking required steps including appointment of merchant bankers, lawyers and valuers to arrive at the swap ratio and definitive agreements, to be placed before the Board for their approval in four weeks from today," the filing said. The proposed merger will be achieved through a cashless scheme of amalgamation, it added.
On filing of the scheme of amalgamation with the relevant regulatory authorities, Sameer Gehlaut, as a promoter, along with the other existing promoter group entities of the IBREL would initiate the process of de-promoterisation. After the scheme of amalgamation is effective, Jitendra Virwani along with his other promoter entities will be the new promoters of the amalgamated company.
"The resultant shareholders of the amalgamated company will be as follows: 1. IBREL Shareholders 2. Embassy Promoters 3. Embassy Institutional Investors," the filing said. Embassy has proposed to merge various assets into IBREL, pursuant to the merger scheme, subject to execution of all the relevant transaction documents.
With this proposed merger deal, Embassy Group seeks to enter into Mumbai and Delhi-NCR markets, the two biggest property markets in the country. Sources had said earlier that the Indiabulls Group plans to merge over dozen remaining assets of IBREL with a new entity that will be led by the Embassy Group. Before this merger proposal with the Embassy Group, IBREL sold many commercial assets to global investment firm Blackstone.