Indiabulls Real Estate to focus on Indian market; sells London property for 200 mn pounds to promoters.

Indiabulls Real Estate on Saturday said that, within its plan to focus on the Indian market and to cut debt, it has sold its property in London to a developer group company for 200 million pounds (around Rs 1,830 crore). On 28 September, The shareholders of the company approved a proposal for the sale of their London property to promoters at it’s Annual General Meeting (AGM).

In a BSE filing, Indiabulls real estate said the “whole-owned subsidiary of the company has divested its entire stake in Hannover Square estate, London and Clivedale Overseas Ltd., which is owned indirectly by Century Ltd, an entity owned by the promoters of the company.”

With this, Century Ltd ceases to be a subsidiary of the company. The firm had previously revealed there plans to focus on its Indian market and it’s pared debt.

“The London property market remains slow in view of ongoing Brexit-related problems as well as uncertainty. The Great Britain pound has also been sustained by a depreciation of the Brexit referendum result,” said the company in the AGM’s notice.

Indiabulls Real Estate stated that it was necessary in order to complete the new construction on Hanover Square 22, London, by getting an additional loan of about 133 million pounds. However, they do not want this new burden to take place on their balance sheet.

“The Board allowed and approved the divestment of the direct or indirect stake in London property to cut debt and concentrate more on the Mumbai and the NCR (National Capital Region) markets,” it had stated.

The company’s promoters came forward for the acquisition of the London property for a total of 200 million pounds over their acquisition costs of 161.5 million pounds, Indiabulls said.

As part of its strategy of focusing on financial services and leaving the real estate sector, Indiabulls Real Estate promoters sold 14% of the company’s stakes via open market transactions to the Embassy Group for Rs 950 in June 2019.

However, last month Indiabulls Group was confronted with a retreat when the RBI denied Indiabulls Housing Finance’s proposed merger with Lakshmi Vilas Bank, a disruptive private sector lender.

The speculations of a merger fate were rife, declared last April, following the restrictions imposed on Lakshmi Vilas Bank by the Reserve Bank of India (RBI) due to its poor financial health.

Indiabulls Group sold several completed commercial properties to the US-based private equity firm Blackstone with a view of entering the banking sector.