AIG Global Real estate to sell RMZ stake in Hyderabad project
Hyderabad- To end the dispute and joint venture with its partner, AIG Global Real Estate has decided to sell developer RMZ Corporation’s stake in a proposed Hyderabad project. They have also decided to part their ways in their other projects as well.
AIG Global Real Estate is a New York-based private equity fund company while RMZ is a Bangalore based company. They together formed a venture with the Private Equity (PE) firm and decided to invest Rs.1,100 crore ($200 million) in five real estate projects.
PE was suppose to invest 80 percent of the value and rest 20 percent by RMZ with stakeholding and the profit to be shared equally. But somehow RMZ failed to invest in a Hyderabad project which covered half value of the joint venture.
Recently AIG sent a legal notice to RMZ and demanded to sell their 50 percent stake in Hyderabad project as compensation. This matter can be settled in two ways i.e either through legal procedures or selling the stake of RMZ Corp at a substantially discounted price.
On one hand ,the Managing Director of RMZ confirmed the latter and announced to end its venture with AIG. While on other hand, AIG is looking for alternatives to save the project like roping in a minority development partner or contracting out project development.
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