Embassy Group: 54% reduction in Indiabulls Real Estate’s net debt, merger with Embassy Group in progress

reduced its net debt by 54% to Rs 464 crore in the three months ended June, compared to the March quarter. Additionally, the merger with Embassy Group is in the final stages of National Company Law Tribunal (NCLT) review, the company said in its investor presentation.

Its net debt stood at Rs 464 crore at the end of the June quarter, from Rs 1,005 crore as of March 31, 2022. Its gross debt fell to Rs 739 crore from Rs 1,310 crore.

Operationally, the company’s sales bookings fell to Rs 297 crore in the first quarter of this financial year from Rs 350 crore in the corresponding period of the previous year.

In April, IBREL had raised Rs 865 crore by issuing shares to institutional investors mainly for land acquisition and debt reduction.

In August 2020, Embassy Group reached a definitive agreement to merge some of its residential and commercial projects with IBREL through a cashless merger program. Embassy Group will become the promoter of the merged entity.

The merger with the embassy in the final stages of the NCLT review and the next hearing in Chandigarh is scheduled for September 8, 2022, IBREL said. The proposed merger of NAM Estates and Embassy One Commercial Property Developments into IBREL is underway, he added.

In February 2021, the Indian Competition Commission (ICC) had approved the proposed merger of Embassy Group companies, NAM Estates Pvt Ltd and Embassy One Commercial Property Developments Pvt Ltd, with IBREL.

Embassy Group holds about 14% of the capital of IBREL and this share will increase to 45% after the merger of the assets of these two companies.

Post-merger, the combined entity will have 80.8 million square feet of launched and planned development potential. The merged entity will have around 30 projects.

Under the terms of the agreement, IBREL shares are valued at Rs 92.5 per share.

Last week, the company announced a consolidated net loss of Rs 51.95 crore for the quarter ended June on lower revenues. Its net profit stood at Rs 4.76 crore in the prior year period.

Total revenue fell to Rs 164.18 crore in the April-June quarter from Rs 532.03 crore in the corresponding period a year earlier, according to a regulatory filing.

Ann J. Cox