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Ansal to raise Rs400 crore from Peninsula Brookfield

Add comment   |   July 7, 2014    01:12am   |Contributed by Indian Realty News

Bangalore: Ansal Properties and Infrastructure Ltd is set to raise Rs.400 crore from Peninsula Brookfield Investment Managers. Peninsula Brookfield is a joint venture between Peninsula Land Ltd and Brookfield Asset Management with Rs.1,000 crore worth of assets under management. The money will be deployed from its maiden fund, Peninsula Brookfield India Real Estate Fund. The transaction is in the last stage of closure and the money will be raised through the non-convertible debenture (NCD) route in the form of structured debt, said two people directly familiar with the transaction. The money is being raised for a massive 2,500 acre development that Ansal had undertaken back in 2009, in a project called Metropolis in Greater Noida. The project, which is under construction, will take another five-six years to complete. “The capital will be used for a mix of things—some of it for project development and some for refinancing earlier loans on the project which will be maturing soon,” said a company executive, who didn’t want to be named. From peak debt levels of Rs.1,800 crore four years back, Ansal has tried to constantly pare debt. Currently, the real estate firm has a gross debt of around Rs.1,050 crore. Property consultant Knight Frank India is the adviser to the transaction. Peninsula Brookfield declined to comment. NCDs have been a popular debt instrument among real estate developers in the past three years. NCDs typically cannot be converted to stock and offer yields of 14-20%. Peninsula Brookfield’s investment strategy is to look at financing and refinancing opportunities, quick turnaround opportunities and buy-in at below intrinsic value with a margin of safety. While looking at deals in key property markets such as Delhi, the National Capital Region, Bangalore and Pune, it partners good quality developers who are in need of capital to restructure their balance sheets or grow. “Investors are not shying away from large projects even though they are long gestation projects. Once the land is acquired and sales start, funding usually comes in where a developer would have sold stock substantially,” said Ambar Maheshwari, managing director, capital markets, property advisory Jones Lang LaSalle India.

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