Unitech on assets sale spree, sells Gurgaon hotel

Unitech Ltd, the country’s second largest developer, on Friday said it has sold out a hotel in Gurgaon for Rs231 crore and is in advance stages of talks for selling out an office complex in the national capital.
The company has also signed memorandum of understandings (MoUs) for sale of school plots in Gurgaon and another realty project in Kochi.
In a presentation to the investors, Unitech said that Marriott Courtyard hotel, comprising 199 rooms, in Gurgaon has been sold out for Rs231 crore to a high networth individual based out of Delhi. Unitech, which raised $325 million to retire part of its Rs8,400 crore debt, plans to sell four more hotels in Noida, Kolkata and Gurgaon within six months. It is also expecting “induction of private equity at project level”. The company is also expecting to close a deal to sell out its Saket office complex, comprising 2.2 lakh sq ft, in the current quarter. As part of its strategy to deal with the slowdown in the realty sector, Unitech is monetising its non-core assets by “deleveraging through sale of assets like hotels, offices and infusion of private equity at individual project level”. The sale of non-core assets are expected to contribute to cash flow of the company. It said that its sales have dipped to an all-time low because of slowdown in property market.

Shriram City To Sell Windmill Biz; PE Warrant Conversion Put Off

Shriram City Union Finance (SCUF) plans to extend the validity of warrants issued by the company to four private equity investors from 12 months to 18 months. The warrants were granted alongside allotment of equity shares on May 3, 2008, SCUF said in a statement to the Bombay Stock Exchange today. The private equity investors are ICICI Ventures (through IDBI Trusteeship Services Ltd), ChrysCapital (through Van Gogh Ltd), Asiabridge Fund I (TPG Newbridge) and Bessemer Venture Partners. The company will seek approval of this and other proposals at its Extraordinary General Meeting on May 11, 2009. The other conditions regarding the warrants, which includes price and conversion ratio, will remain the same. The equity shares were subscribed at Rs 400 per share and the current shareholding as of March 30, 2008 stands at ICICI Venture (6.64%), ChrysCapital (13%), Bessemer (2.73%) and TPG Newbridge (1.28%). Another major shareholder is Merrill Lynch Private Equity, which holds an 8.72% stake in SCUF.
The warrants were issued at a subscription price of Rs 40 per warrant, with an option to subscribe to one equity share per warrant at an exercise price of Rs 400. This is higher than the current trading price of Rs 322. The total warrants held by the four private equity players are 3.25 million, and upon conversion will amount to 6.6% stake collectively. With the warrant conversion price at a premium to current trading price, the investors and the company would be hoping that the share price may come to Rs 400 level in the next six months. Otherwise, the investors can pick up the stake through secondary purchases from the open markets.
SCUF, part of the Chennai-based Shriram Group, is one of the largest retail financiers in the consumer durable segment. In September last year, Shriram Group sold a 49% stake in Shriram Retail Holdings Ltd, the holding company of of SCUF, to Texas Pacific Group (TPG). Through this deal, TPG indirectly acquired upto 26.7% in SCUF, and has made an open offer for another 20% stake in the firm. Warrants have become tricky issues for private equity players with crash of markets from levels reached in January 2008. In February this year, private equity major Warburg Pincus converted warrants held by it in Havell's at a high premium of Rs 690 per share as compared to the then prevailing market price Rs 110-120 per share. But the warrants held by private equity funds in Shriram City Union Finance are optional.
Selling Non-Core Assets
SCUF has also decided to sell its shareholding in non-core assets. These include selling its holding in its windmill business in Tamil Nadu and Karnataka, including assets like plant, machinery, etc. SCUF also plans to sell and transfer stake in Shriram Life Insurance Company Ltd and its wholly owned subsidiary Shriram Non Conventional Energy Ltd.
Interestingly, Shriram Group firm Shriram EPC has promoted along with Bessemer Venture Partners a renewable energy company, Orient Green Power Ltd.

Pantaloon to realign companies, raise Rs 1,500 cr in 2 months

Kishore Biyani's Pantaloon Retail India intends to complete in the next two months legalities for its ambitious plans of raising Rs 1,500 crore and realigning of group companies for expansion Two months time is a good estimate (for the proposal's completion)," a company source said here. The Board of Directors of the BSE-listed firm met here yesterday and approved raising Rs 367 crore through preferential allotment of shares and warrants.
It is believed that Future Group is in talks with Carlyle, Bain Capital, Blackstone, Kohlberg Kravis & Roberts for private equity funding of about Rs 1,100-1,200 crore.
"We are looking to raise funds independently without diluting any stake," the source said, without giving details. In a major realignment exercise, the board proposed to rechristen Pantaloon Retail India (PRIL) as Future Market & Consumer Goods (FMGC), which will be the holding company for its multiple subsidiaries. It is believed that Big Bazaar and Food Bazaar (its value retail segments) may be hived off into a separate entity called Future Value Retail, if they find a suitable partner. "The proposed company - FMCG Ltd - will be the holding company for our two main subsidiaries, which will be created to focus on fashion and retail," Future Group founder and CEO Kishore Biyani told PTI. Existing companies like Future Capital Holdings, Future Media and Future Logistics will come under FMCG Ltd. "No new subsidiaries (apart from fashion and retail) are being created," the source said. Pantaloon Retail India will sell 11 million shares at Rs 183 -- the firm's closing price on Thursday last -- for raising Rs 201 crore, the company said in an emailed statement. Another 4.1 million shares will be sold at the same price to Dharmayug Investments Ltd to bring in Rs 75 crore.

RBS Begins Sale Process

Royal Bank of Scotland Plc. (RBS) has started the sale process of ABN Amro Bank NV’s retail and commercial banking assets in Asia, including India, reports Mint. They have sent an information memorandum to three prospective buyers—Australia and New Zealand Banking Group Ltd, Standard Chartered Bank Plc., and Hongkong and Shanghai Banking Corp. Ltd, Mint reports quoting a person familiar with the development. Investment bank Morgan Stanley is managing the RBS sale across Asia.

L&T is looking out to exit/sell stake in projects in which they have minority stake

Engineering major Larsen & Toubro (L&T) is looking to exit from the infrastructure projects in which it holds minority stake, but open to bid in consortium with less than 50 per cent holding in large and complex projects like metro.

"Within IDPL, L&T is looking to sell off its stake in existing projects in which it has less than a 50 per cent stake," Macquarie said quoting deliberation of an analyst meet for L&T's Infrastructure Development business, L&T IDPL. Only in extremely large and complex projects, like urban metro, L&T might bid in a consortium and take less than a 50 per cent stake to diversify the risk, Macquarie said, adding that the company was bidding for most of the projects on its own and keeping larger stake where it was bidding in consortium. L&T IDPL is engaged into the development of airports, ports & harbours, railways, roads and water projects. "L&T's share in these projects (where it has below 50 per cent stake) would be below Rs 200 crore," one Macquarie analyst told PTI. L&T IDPL's existing portfolio has a total capital outlay of Rs 31,7OO crore. L&T's share of total equity investment would be around Rs 2,000 crore. It has already pumped in Rs 800 crore in these projects.

MindTree restructures operations, eyes buyouts

MindTree is eyeing strategic buyouts in areas such as package applications and mechanical engineering services even as it restructures operations as part of growth plans to become a billion-dollar company. The Chief Executive Officer, Mr Krishnakumar Natarajan, who will assume the additional role of Managing Director from Wednesday, said the company was exploring potential targets in areas of mechanical engineering to enhance product design capabilities and in package applications, besides looking at geographies such as Europe and Japan to expand the footprint.

Emami forms panel to restructure operations

FMCG company Emami today said it will restructure the operations of its two subsidiaries - Zandu Pharmaceutical Works and Emami Realty - and has formed a committee to evaluate various options for the same. "We have formed a committee to look into various options for realignment of activities of our two domestic subsidiaries," Emami Ltd Chief Financial Officer and President N Bhansali said "The committee would evaluate options, including merger, demerger or whether the realty business would continue as it was", he added.
In a meeting today, the board of directors of the company discussed various options for restructuring and reorganising FMCG and realty business carried on by Emami Ltd and subsidiaries -- Zandu Pharmaceutical Works and Emami Realty, Bhansali said.
"In the current recessionary time, there has been severe impact on the real estate business, so the review for getting optimum synergistic benefit was necessary," Bhansali said.
Asked if the company would sell its entire stake of the realty subsidiary, Bhansali added "Earlier the board had decided to sell the stake in the realty business, but it is not going to sell to any outsider. Everything will be cleared only after the committee submits its report."