Emaar MGF to buy back Citibank stake

Real estate major Emaar MGF is in talks with Citibank International to buy back securities of Emaar MGF Land Ltd.

Citibank International, a company incorporated in Britain, had invested $150 million (Rs 685 crore) in convertible securities issued by Emaar MGF in 2006.

In the past month, Citibank has been scouting for probable banks and institutions to offload the papers at a discount.

The deal between the two was one of the many foreign direct investments in real estate that happened through various structures during 2006-07.

These transactions were later banned by regulators due to the rush of foreign investments in the Indian real estate market.

When Business Standard contacted Emaar MGF, a senior executive said they were in talks with Citibank and something would be formalised in a week.

“We are currently under talks and according to the memorandum of understanding, we cannot disclose details at present. We expect things to be finalised in the next week or so,” said the senior executive, on condition of anonymity. He refused to comment on the value of the deal. “We can give you the details once the papers are signed,” he said.

Emaar MGF has been delaying its initial public offering (IPO) and it is expected that the company would cut it by about half the earlier plan, to Rs 2,000 crore. It had put its IPO plans on hold twice (2008 and 2009) due to adverse market conditions.