Post Blackstone deal, Prestige Estates net debt reduces to ₹997.5 crore

Bengaluru | Updated on March 10, 2021

Irfan Razack, CMD   -  BL

Prestige Estates Projects Limited has completed phase-1 of proposed transaction with Blackstone Group which included 100 per cent stake sale in six completed office projects (including a hotel), 50 per cent stake sale in four under-construction projects and 85 per cent stake sale in nine shopping malls.

In all, phase-1 transactions included sale of 12 assets/undertakings comprising completed retail, office and hotel assets. Phase 2 of the transaction is expected to get completed by the end of next quarter.

In a regulatory filing to exchanges, the company said phase-1 transactions involved ₹7,467 crore out of the total enterprise value of approximately ₹9,160 crore.

With phase-I sale going through, the company’s net debt gets reduced to ₹997.5 crore. The company's consolidated net debt as on December 31, 2020 stood at ₹8,464.5 crore

Strengthening foundation

Commenting on this transaction, Irfan Razack, Chairman, Prestige Group, said: “We believe that this transaction will further strengthen our foundation and help us in gearing up for the next level of growth. This transaction will also aid us in building long-term strategic partnership with Blackstone Group and leverage the respective strengths of both to create value for the stakeholders. With our unparalleled execution track record, balanced portfolio across segments and geographies and deep management expertise, we are uniquely positioned to capture opportunities for growth and gain from the accelerated consolidation that is taking place in the real estate industry. We have a strong development pipeline of about 43 million sft office and retail portfolio in the key locations across the cities and in the next 4-5 years it is projected to yield rentals of over ₹3,000 crore per annum —growth close to 10x of our post deal rental portfolio of about ₹300 crore.”

Venkat K Narayana, Chief Executive Officer, Prestige Group, said: “This marks the beginning of the next chapter of our journey. This transaction is well aligned with our capital recycling strategy coupled with financial and strategic benefits. Financially, it provides us with the best opportunity to deleverage and further strengthen the balance sheet. Our consolidated net debt as on December 31, 2020 was ₹8,464.5 crore and current transaction value itself is ₹7,467 crore. Strategically, this will aid in releasing significant management bandwidth to focus on new growth areas and increasing our market share across key cities and business segments. Proceeds from the transaction will be used to repay debt, for growth and for construction of on-going projects.”

Published on March 10, 2021

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