The Hindu Business Line : Emaar MGF looks at pvt equity funding

New Delhi, July 1 Emaar MGF, a joint venture between MGF Development Ltd and Emaar Properties PJSC of Dubai, is open to private equity funding at the overall company level, even while it explores a ‘tranche approach’ for special purpose vehicle related financing.

The real estate company had withdrawn its initial public offering following market turmoil earlier this year.

“We will be open to a new private fund fund but not a new partner. Our existing partnership is set. If there is recognition of value, and a mutually-agreeable number that can be achieved, we are very open to private equity funding at a corporate level,” Mr William R. Rattazzi, Chief Executive Officer of Emaar MGF Land, said but refused to divulge details.

At present, the MGF Group holds 53.3 per cent stake in the real estate company, Emaar has 41.9 per cent stake, and various private equity firms the balance 4.8 per cent stake.

“We are in the process of doing SPV-related financing. The way we look at SPV financing, there could be specific large projects, or even SPVs where we pool different kinds of projects together. We feel that specific investors may want to have a bit of commercial, retail, multiplex, residential, greenfield and re-development exposure, based on the risk profile and return. A basket or a tranche approach will make sense, and this is one of the ways we will go,” he added.

Real estate inflow

Mr Rattazzi said that the company continued to achieve cash flows and revenue from existing projects such as Boulder Hills and Mohali Hills. “Emaar’s commitment to the joint venture is huge and growing both from a personnel standpoint as well as the financial investment standpoint. The board of Emaar continuously meets on further equity infusion and we expect that to continue,” he said.

“The industry is at a point — though a short run — where the liquidity is being sucked out of the market versus being pushed into the market. But India is a bright star in the investment horizon for people who want to invest in realty. The FDI inflows in real estate and housing in fiscal 2008 were five times that of the previous year,” he pointed out.

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