On April 5, Indiabulls Real Estate disclosed that the board has sanctioned the raising of Rs.3,911 crore through the issuance of shares and warrants to investors, which include the Blackstone Group and the Embassy Group.
Global investment firm Blackstone will invest Rs.1,235 crore, while the Bengaluru-based Embassy Group will inject Rs.1,160 crore.
Following the conversion of the warrants, the Embassy Group's ownership stake will increase to 18.7%, with Blackstone holding 12.4%.
IBREL has stated in a regulatory filing that the board has given its approval for a "capital infusion through the issuance of equity shares and convertible warrants, on a private placement basis, in exchange for cash, totaling approximately Rs.3,910.93 crore."
The objective of this action is to strengthen its financial position and prepare the organization for both internal and external expansion opportunities.
This encompasses capital spending to finalize ongoing projects and introduce new ones, along with potential acquisitions, additional working capital needs, and general corporate objectives.
The board has approved the issuance of 9,13,55,606 fully-paid equity shares of a face value Rs 2 each of the company at Rs.111.51.
These securities must be issued to certain entities of the Embassy Group, Baillie Gifford, entities controlled by funds managed by affiliates of Blackstone Inc. (Blackstone Real Estate Fund), funds managed by Quant Money Managers, Poonawalla Finance and other financial investors.
The approval of the said board is subject to the approval of the shareholders of the company and other requisite approvals.
In the filing, IBREL has mentioned that the board has approved asset acquisitions worth Rs.1,853 crore to re-energise the business and fuel growth.
The executive director, IBREL, Sachin Shah said,"We are excited to announce the recapitalisation of the company, which also includes four strategic asset acquisitions that boost our project pipeline."
He also added,"We are grateful for the constant support of our two largest shareholders. We are thrilled that we have a roster of new blue chip investors who have come on board and validated the company and its growth prospects. The funds will allow us to complete our existing projects and pursue new opportunities. This investment is a culmination of the turnaround strategy that has taken place over the past 13 months."
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