India: RMZ inks $1b deal to buy back shares from Qatar fund, Baring PE – Report

Photo: RMZ Corp website

Indian commercial real estate major RMZ is reportedly buying out Qatar Investment Authority (QIA) and Baring Private Equity Partners by buying out their combined 46 per cent stake in a deal estimated to be around $1 billion.

According to a source-based report in Times of India, the transaction values the company at over $2 billion, although the asset valuation is pegged higher at $4 billion.

Baring PE holds 21 a per cent stake in RMZ Corp, while sovereign fund Qatar Investment Authority holds a 25 per cent stake. Baring had invested Rs450 crore in RMZ 2012 while QIA invested Rs 600 crore a year later.

Canada Pension Plan Investment Board (CPPIB) and Singapore’s GIC Pte Ltd were earlier reported to be in separate negotiations with Baring Private Equity Partners India to acquire its stake in RMZ Corp.

According to the latest news report, the promoters of RMZ — billionaire brothers Raj and Manoj Menda — purchased the stake from its two investors in a bid to quash a hostile bid by rival Embassy Group.

RMZ competes with Embassy Office Parks, a joint venture between Virwani and Blackstone Group, and K Raheja Corp in building out large tenanted office spaces in Asia’s third-largest economy.

It was recently also reported that Embassy Group, which has three industrial parks in Pune, Gurugram and Farrukhnagar (Haryana), plans to invest around $1 billion in 3-4 years to take its total space to 30 million sq. ft.

RMZ Infotech, on the other hand, operates about 24 million sq ft of fully leased office buildings.

RMZ promoters told Times of India that the share buyback was being paid out through bank financing and internal accruals. Post the completion of the deal, the owners will consolidate all the established, fully tenanted business parks under a holding company. The Mendas said the promoters would retain full ownership of RIPL through family trusts from now on.

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