Alternative investment firm Alpha Wave Global has agreed to invest Rs 1,250 crore (about $145 million) in a joint venture of Oberoi Realty Ltd and the Mumbai-listed developer’s chairman and managing director.
Alpha Wave will get a 21.74% stake in the joint venture, I-Ven Realty Ltd, on a fully diluted basis, Oberoi Realty said in a stock-exchange filing Thursday.
I-Ven Realty is currently an equal joint venture between Oberoi Realty and its chairman Vikas Oberoi. I-Ven's main function is construction, development and operation of real estate projects.
Separately, I-Ven Realty will raise Rs 165 crore, or about $20 million, from its existing shareholders – Oberoi Realty and Vikas Oberoi – by issuing 4.125 million redeemable preference shares.
The fund infusion, a pre-condition to Alpha Wave’s stake buy, “will be primarily utilized to repay the outstanding amounts of the loan availed from Oberoi Realtyand Vikas Oberoi”.
The completion of this transaction will also reduce the two existing promoters’ shareholding in the company from the current 50% stake owned, respectively.
Oberoi Realty bought a 50% stake in I-Ven Realty in 2013 from Mumbai-based PE firm ICICI Venture. The company was formed in 2003 to buy a four-acre land parcel in Mumbai’s Worli from Glaxo SmithKline.
The JV received necessary approvals in 2016. The plot was earlier supposed to be used to develop 44 duplex apartments in two towers. It was later reported that the developer would use the land parcel to build a luxury mall, a boutique hotel, and an office space, across the 1.8-million square feet development area. According to a 2017 media report, a part of the land was also to be provided on a temporary basis to the Mumbai Metropolitan Region Development Authority for the metro station in Worli.
