First real estate bulk deal in Delhi NCR
New Delhi-based realty major Emaar MGF to sell its under-construction 550-flat residential complex Emaar MGF Palm Drive, one of the popular residential developments in Gurgaon neighborhood of Delhi-NCR, for Rs 1200 crore. Emaar MGF is learnt to be in an advanced stage of selling its apartment in a bulk deal for Rs 1200 crore to New York-based marquee realtor Tishman Speyer.
For the beleaguered Emaar MGF, a joint-venture between Dubai-based Emaar and Shravan Gupta-led MGF Land Ltd, this is a fire sale, as the company is unable to sell the flats by itself owing to the current slump in the housing market and desperately needs money to retire part of its Rs 4689 crore debt and improve its cash flows.
The American realtor currently manages the iconic Rockefeller Center building in Manhattan. Tishman currently has three properties in India, one in Chennai and two in Hyderabad. The deal, if it goes through, can provide Emaar MGF some reprieve, as it can look to retire a third of its debt.
The 2009 meltdown in the Dubai property market hurt its joint-venture partner Emaar badly. That, coupled with its still-in-limbo IPO first scuttled by a bad market in February 2008, and subsequently red-flagged by market regulator Sebi twice, last time in September 2010 over irregularities in its offer document and controversies around its development of the Commonwealth Games Village, has put the company in a tight spot.
The company was in talks with Tishman to sell a small project for Rs 220 crore in Gurgaon two months back, but has now shelved that plan as it needs more money to improve its cash flow on an immediate basis, people with direct knowledge of the ongoing transaction said.
Despite its current troubles, Emaar-MGF has managed to scale down its debt from Rs 6,000 crore a year and a half back to Rs 4,689 crore in September 2010.
When contacted, Emaar MGF CFO and executive president Sanjeev Saddy said: “Talks with Tishman Speyer are in preliminary stages. It’s a good move for us if we realise the optimum value of the flats. But nothing concrete has materialised as yet.” Tishman declined to comment on the development.
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