BY TEAM VCC
The
demerged biz will be amalgamate with Prozone, backed by UK’s Capital Shopping
& Triangle Real Estate India Fund.
Provogue (India) Ltd is restructuring its
business by demerging its real estate business in a move which will give
strategic and private equity investors more liquidity. The apparel retailer,
backed by ace investor Rakesh Jhunjhunwala, has raised funding for its real
estate business from the UK-based Capital Shopping Centres Group (one of the
largest REITs focused on shopping centre management and development) and
Triangle Real Estate India Fund.
The move is similar to that of Agre
Developers, which was demerged from Pantaloon Retail (India) Ltd last year, to
focus on retail real estate, infra-logistics parks and development of wholesale
markets.
The new entity, to be listed, will be
called Prozone Capital Shopping Centres Ltd. The share price of Provogue
(India) closed at Rs 30.5 per unit on the BSE on Monday, down 2.87 per cent.
The company currently has a market capitalisation of around Rs 350 crore.
Under the deal, Provogue will transfer its
retail-centric real estate development division to Castle Mall Pvt Ltd, which
will amalgamate the business with Prozone Enterprises Pvt Ltd, a subsidiary of
Provogue. While shareholders will get 1:1 share for the demerger, the exchange
ratio for the amalgamation is 313:75. Ladderup Corporate Advisory is the
advisor to the above transaction.
The Capital Shopping Centres Group,
formerly known as Liberty International Plc., had picked up 25 per cent of
equity stake in Prozone Enterprises for Rs 202.5 crore in 2005, valuing the
company over Rs 800 crore. Prozone is building retail-centric, mixed-use
development projects in tier II cities like Aurangabad, Indore, Coimbatore and
Nagpur.
Last year, Triangle Real Estate India Fund
(co-promoted by ICS Realty Group and Old Mutual Investment Group Property
Investments) invested Rs 306 crore for 35 per cent stake in three of its
project SPVs – namely, Aurangabad, Nagpur and Coimbatore. The deal valued the
projects at Rs 865 crore.
Its Aurangabad property was launched last
year with tenants including Shoppers Stop, Globus and Star Bazaar, besides
Satyam Cinemas.
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