The Hindu Business Line : Indiabulls Fin de-merges real estate division

The board of Indiabulls Financial Services Ltd (IBFSL) today approved the restructuring of the company's businesses through a scheme of de-merger. The scheme proposes to de-merge the assets and liabilities of the real estate undertakings of IBFSL into Indiabulls Real Estate Ltd, subject to certain necessary approvals.

As per the shareholding pattern in the de-merged entity, all shareholders of IBFSL will be issued shares of Indiabulls Real Estate in the ratio of 1:1. That is, for each IBFSL equity share of face value Rs 2 fully paid up, shareholders will be allotted one equity share of Indiabulls Real Estate of face value of Rs 2.

Shareholders of IBFSL thus will continue to hold the same number of shares and, in addition, will receive corresponding number of shares in the de-merged entity. The shares of the de-merged entity will be listed on the stock exchanges in India, where IBFSL shares are listed.

According to the company, this will clearly unlock value for all shareholders, as they can participate directly in both the financial services and the real estate construction/development business of the company.

The properties

The de-merged entity will include IBFSL's investments in the real estate undertakings. This includes the acquisition of 11 acres of Jupiter Mills land in Lower Parel, Mumbai, acquired by Indiabulls Properties Pvt Ltd from NTC through an auction for Rs 276.6 crore and another acquisition of 7.8 acres of Elphinstone Mills land in the same area by Indiabulls Real Estate Co from NTC for Rs 441.75 crore.

Also, Indiabulls Estate and its subsidiaries are in the process of acquiring land for construction and development of township and housing project in Sonepat, Haryana — these companies have already acquired over 115 acres of land in that area.

Indiabulls infrastructure Ltd, through its wholly owned subsidiary, owns 50 per cent shareholding in Kenneth Builders and Developers Pvt Ltd, a company had won the 35.8 acres of residential land located in south Delhi through an open auction by Delhi Development Authority for a consideration of Rs 450.01 crore — this is for a public-private partnership project.