Embassy REIT To Issue Rs 1,000-Crore NCDs For Debt Repayment

Embassy Office Parks REIT approved on Wednesday the issuance of listed non-convertible debentures worth Rs 1,000 crore. The proceeds from the issuance of NCDs will be used for repayment of existing debt.

The company will issue 1 lakh listed, rated, secured, redeemable, transferable, rupee-denominated NCDs on a private placement basis. The NCDs will have a term of four years and 363 days from the date of allotment, according to an exchange filing on Wednesday.

The approval was given at a meeting of the debenture committee of the board of directors of Embassy Office Parks Management Services Pvt., the manager to Embassy REIT, the filing stated.

In October, Embassy REIT had raised Rs 2,000 crore debt to repay the NCDs maturing that month. The company raised the amount with a coupon-bearing debt at an interest rate of 7.95%.

This refinancing continues to allow the company to optimally control its balance sheet and position it to take advantage of future rate cuts to raise capital, according to Aravind Maiya, chief executive officer of Embassy REIT.

In November, Maiya stepped down from his post after the Securities and Exchange Board of India directed the company to suspend him and appoint an interim CEO.

Shares of Embassy REIT fell 0.85% during the day to Rs 371.10 apiece on the National Stock Exchange. It closed 0.64% lower at Rs 371.87 per share before the annoucement, compared to a 0.13% advance in the benchmark Nifty. The share price has advanced 13.68% on a year-to-date basis.

Sixteen analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 12.5%.