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IBREL to carve out commercial office business into separate firm

LiveMint logoLiveMint 17-04-2017 Madhurima Nandy

Bengaluru: In a major restructuring of its real estate business, Indiabulls Real Estate Ltd (IBREL) has decided to create a separate leasing and commercial vertical under Indiabulls Commercial Assets Ltd which will focus on the annuity business through rental income of existing office projects, under-development and new projects, while the residential business will remain under IBREL.

The decision was taken at a board meeting on Monday morning.

The reorganizing of the business has been done to create Indiabulls Commercial Assets Ltd as a separate holding company that will hold the assets and investments related to leasing and commercial business and to explore opportunities to bring in strategic investments. It may also result in a demerger of the IBREL so that there is greater focus on individual businesses—residential and commercial development.

IBREL informed the stock exchange that a restructuring committee has been constituted comprising some of its directors and officers to examine and evaluate the feasibility to implement the proposed restructuring of the businesses and special purpose vehicles (SPV) and prepare a draft scheme or proposal to be placed before the board for its approval on a later date.

Post restructuring, as of 31 March, Indiabulls Commercial Assets has a net worth of Rs2,311 crore and debt of Rs3,950 crore. Its estimated annuity revenue in 2017-18 will be around Rs692 crore and the potential revenue generation in 2020-21 will be Rs1,357 crore, IBREL said.

Indiabulls Real Estate Ltd rose 13% to Rs120 on the BSE on Monday, while the BSE Sensex fell 0.01% to 29,459 points at 11.23am.

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