Brookfield Asset Management to buy Unitech Corporate Park assets for Rs 3,500 crore

NEW DELHI: Canadian firm Brookfield Asset Management is acquiring 100% shareholding in four SEZs owned by Unitech Corporate Parks (UCP) and a 60% shareholding in another two of its assets in India for Rs 3,500 crore, two people close to the development, who did not wish to be named, said.

The asset management firm has agreed to buy the entire stake of Candor Investments, a subsidiary of London Stock Exchange-listed India-focused real estate investment firm UCP that will forgo it 60% share in the firm’s six commercial assets in India — five SEZs and one IT park. It has also signed a deal to buy Indian real estate firm Unitech’s 40% stake in four of the six assets.

Brookfield already owns 16.65% in Candor and is seeking to buy out stakes from other investors that include RBS AA Holdings (UK) Limited (20.08%), SC Fundamental (13.69%) and Roveda Holdings (9.01%).

Unitech also holds 13.62% in Candor through a company called Nectrus, which it is willing to sell, said one of the persons quoted earlier.

“In addition to the announcement on 3 April 2014 that the Company had received an approach from a third party expressing interest in a potential acquisition of the Company's wholly owned subsidiary Candor Investments Limited, the holding company for UCP’s property interests, the Company announces that it has entered into an agreement with an affiliate of Brookfield Property Partners for the sale and purchase of the entire issued share capital of Candor,” UCP said in a statement today.

“The Disposal Agreement provides that Brookfield will acquire Candor, subject to certain conditions, for an aggregate cash consideration of approximately £205.9 million,” it said, adding that a circular has been posted to shareholders setting out the background to and reasons for the disposal. An extraordinary general meeting has been convened on June 27 to seek shareholder approval.

Unitech will raise close to Rs 1,500 crore from this sale to Brookfield which will be used to reduce its debt which stood at Rs 6,316 crore at the end of March 2014.

A statement by Unitech today said, “the interest of two of the affiliates of Unitech Limited in 4 of the 6 IT SEZ/Parks stands transferred to an independent company. These 4 are the most mature in terms of their development status.”

“As part of this transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure that there is no impact on tenants and other stakeholders,” the company said.

“The independent company set up by Unitech will be acquired by Brookfield which will then own 100% in four assets. The other two assets, an SEZ in Greater Noida and an IT Park in Noida, will be jointly developed by Brookfield and Unitech,” the person quoted above said. “Brookfield may acquire them at a later stage.”
UCP had raised around £360 million in an IPO on the London Stock Exchange in December 2006. The money was raised to invest in six SEZs and IT parks — two in Gurgaon, three in Noida and one in Kolkata.