Indiabulls Real Estate Ltd. will sell its London property to its promoters for £200 million (approximately Rs 1,800 crore) as part of its strategy to focus on its business in India and cut debt.
The company's net debt stood at Rs 4,590 crore at the end of the fourth quarter of financial year 2018-19 and the same would be reduced to around Rs 3,000 crore after this proposed deal with promoters conclude.
"The company has decided to focus only on Mumbai and NCR markets, and hence has decided to divest Century Ltd., the parent company that houses Hanover Square property, London," Mumbai-based Indiabulls Real Estate said in an analyst presentation.
"In light of continuing Brexit related issues and uncertainty around it, the London property market remains sluggish, so the promoter has undertaken to buy the parent company of London asset for £200 million," it added. The company had purchased this property for £161.5 million, it said, and the current valuation has been pegged at £189 million.
"The transaction is subject to approvals including the shareholders nod. Since it is a related party transaction, the promoter will not be participating in the voting on this item," the company said.
Meanwhile, Indiabulls Real Estate posted a 95 percent decline in its consolidated net profit at Rs 108.56 crore for the fourth quarter of the last fiscal as against Rs 2,181.13 crore in the year-ago period, according to a regulatory filing. Total income also declined to Rs 2,040.61 crore in January-March quarter of 2018-19 financial year from Rs 3,244.25 crore in the corresponding period of the previous year.
During the full 2018-19 fiscal year, net profit declined to Rs 504 crore from Rs 2,372.84 crore in the previous year. Total income rose to Rs 5,222.93 crore in the last fiscal from Rs 4,731.84 crore in the 2017-18 fiscal.
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