Combination to create one of India’s leading real estate development platforms

§    IBREL and Embassy Group executed definitive agreements in August 2020 confirming their participation in a merger and their respective boards had approved and announced corresponding share swap ratio.

§    Certain entities controlled by The Blackstone Group Inc. (collectively, ‘BREP’) and other institutional investors who had submitted a non-binding LOI for participation in the proposed merger have subsequently executed definitive agreements.

§    The proposed Scheme of Amalgamation was filed with the Competition Commission of India (‘CCI’) and stock exchanges, for necessary approvals.

§    IBREL today announced that all the relevant regulatory approvals have been received, thus bringing the merger one step closer to completion. Further, with all necessary corporate approvals on track the merger process is now progressing to completion in a timely manner. Both parties will next approach the NCLT(s) along with respective shareholders and creditors for their approval and sanction of the proposed merger.

§    The merger is expected to create one of the leading market players among listed companies in the real estate sector in terms of surplus from launched projects, land bank ownership and residential stock and planned area development in India.

§    The combined platform is expected to accelerate growth with IBREL recording one of the highest quarterly sales within real estate industry at Rs. 9,905 million across all existing projects.

§    The combined listed entity shall be owned ~44.9% by Embassy Group, 26.2% by the existing public & institutional shareholders, 9.8% by existing IBREL Promoter Group and ~19.1% by BREP & other institutional investors.

Indiabulls Real Estate Ltd (IBREL) today announced that they are one step closer to building one of India’s leading real estate development platforms.

The Proposed Scheme of Amalgamation between IBREL, NAM Estates Pvt Ltd (‘NAM’), Embassy One Commercial Property Developments Private Limited (‘EOCPDPL’) (NAM and EOCPDPL being subsidiaries of the Embassy Group) which was filed with CCI,  Bombay Stock Exchange (‘BSE’), National Stock Exchange (‘NSE’) and Securities Exchange Board of India (‘SEBI’) through the stock exchanges, has received all relevant regulatory approvals, and with all necessary corporate approvals on track, the merger process is now progressing to completion in a timely manner.

Embassy Group is one of the largest developers in Bengaluru and holds 14% of IBREL. The Embassy Group entered into definitive agreement with IBREL to merge its certain residential and commercial projects with IBREL through a cash-less scheme of amalgamation whereby Embassy Group shall become the promoters of the merged entity upon effectiveness of the merger. Further, as part of the merger process, certain entities controlled by BREP would also contribute certain identified residential projects to the merger through a share swap arrangement with Embassy Group entities, subject to the satisfaction of certain conditions.

The resulting combined entity, Embassy Developments Limited[1], will hold both Embassy Group’s and IBREL’s ongoing, completed but unsold and planned projects with 80.8 million sq ft of development potential, thus becoming one of the largest property development platforms in the country. The combined entity shall benefit from a complementary pan-India presence across key markets including a strong presence in the commercial and residential market of Bengaluru, Mumbai and NCR. The merger shall provide diversification to IBREL shareholders through a balanced mix of residential and commercial development with visibility on near term liquidity through sold receivables in excess of Rs. 4,220 crores for the combined entity.

Individually, both IBREL and Embassy Group have shown exceptional resilience and turnaround from the pandemic related market dislocations. IBREL recorded one of its highest quarterly sales figures in the past quarter at Rs. 9,905 million and dominated the Mumbai premium luxury market with its sales of iconic Indiabulls Blu Estate & Club residential towers in Worli. Embassy Group projects have shown a similar significant sale uptake in the same period within the Bangalore market.

Jitendra Virwani, Chairman & Founder of the Embassy Group said, “With the Scheme having received necessary approvals from CCI, SEBI & the stock exchanges and definitive agreements entered with BREP and other institutional investors, the merger is now fully on track to fruition. We hope to complete the process by the third quarter of FY 22”.

Mehul Johnson, Joint Managing Director of IBREL said, “Embassy Group completing the execution of definitive agreements with institutional investors, including BREP, to participate in the merger and the Scheme receiving required approvals from CCI, SEBI & the stock exchanges in a timely manner are significant achievements and a significant step closer to the completion of the merger. These institutional investors bring with them strong corporate governance standards and best practices and will only further enhance value for shareholders of the combined entity in the long term”.