INDIA BUSINESS WORLD - March 16th - March 31st - 2008
ASHMORE PICKS 35% IN DELHI REALTY CO FOR $550 M
UK-based private equity firm Ashmore Investment has picked up close to 35% stake for $550 million in Central Park Estates, a real estate firm of the New Delhi-based infrastructure group Oriental Structural Engineers (OSE).
“Central Park Estates has a net worth of $1.62 billion. Recently, we sold around one-third stake in the company to UK-based Ashmore Investment,” said Central Park Estates director Amarjeet Bakshi, when contacted. While the buzz is that the investment is in a company called Shweta Estates, Mr Bakshi said Shweta is the holding company of Central Park.
The transaction closed a couple of months ago and the company has already received the first tranche of $125 million, according to a source. It has a land bank of around 150 acres, largely in and around Gurgaon. The firm has been engaged in the development of houses, hotels and commercial complexes.
This investment is one of the biggest made by Ashmore in India. Earlier, the PE firm, which manages funds worth $36.5 billion, had picked up a 19% stake for $23 million in Quality Care India (QCIL), the holding company of CARE group of hospitals. Ashmore, which focuses on a number of investment themes including dollar debt, local currency and equity, was also reported to be interested in buying stake in Broadband Pacenet, a Mumbai-based broadband services provider founded by a former Zee group executive.
vThe Ashmore-Central Park transaction appears to be the outcome of the buoyancy last year, which witnessed tremendous investor interest and flurry of PE deals in the real estate sector. The last month has however seen a reversal in this trend and the pace of PE deals has in the real estate sector has substantially slowed down. Several realty firms have put their public offer plans on hold and some of the PE negotiations are getting delayed over valuations.
Last year, India’s largest real estate developer DLF sold 49% stake in seven housing projects to Merrill Lynch for $377 million. In another deal, Global hedge fund DE Shaw made an investment of $250 million in Mack Star Marketing, a unit of Mumbai-based public listed real estate developer Housing Development & Infrastructure (HDIL). Besides, the publicly listed Akruti City raised Rs 1,500 crore from Citi Venture Capital International and AIG.
In another important deal, Government Investment Corporation of Singapore and Citigroup Venture Capital International together bought a 15% stake for $290 million in the construction giant Shapoorji Pallonji’s real estate SPV. Delhi-based Vatika group too attracted an investment of $150 million from a Mauritius based entity co-promoted by Baer Capital Partners and Goldman Sachs.
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