Embassy, Blackstone may join hands for RMZ stake

Bengaluru-based Embassy Group may tie up with US-based private equity investor Blackstone to buy a stake in RMZ Corp, said a source. RMZ is one of the largest developers of office properties in the country.

Embassy wants to buy the stake held by the Qatar Investment Authority (QIA) and Baring Private Equity, the source added. “They (Embassy Group) could tie up with Blackstone, since they already have a partnership for other funds,” said the source. QIA holds a 24 per cent stake in RMZ and the latter is buying back the stake from QIA in March.

Baring is also looking for buyers for its stake. It has appointed Standard Chartered Bank to find buyers. It holds 21 per cent stake in RMZ. Embassy is likely to offer a valuation between Rs 85 billion and Rs 90 billion for both the investors, reports said recently.

     Embassy’s Mega Buy

• Embassy wants to buy RMZ’s stake currently held by the Qatar Investment Authority and Baring Private Equity
• QIA holds 24 per cent stake. RMZ is likely to buy it back in March
• Baring has appointed Standard Chartered Bank to find buyers. It holds 21 per cent stake in RMZ
• Embassy is likely to offer a valuation between  Rs 85 billion and Rs 90 billion for both the investors, reports said recently

When contacted, Jitu Virwani, chairman and managing director of Embassy, said: “We want to buy the stake.” A spokesperson for Blackstone said they didn’t want to comment.

Blackstone and Embassy already have a joint venture (JV) called Embassy Office Parks, which wants to float a real estate investment trust (Reit) in the country. 

Embassy Office Parks has office assets of 20 million sq ft in Bengaluru and other southern cities, similar to the size of the portfolio held by RMZ.
 

Though the company planned to file a draft red herring prospectus (DRHP) for its Reit last year, it has postponed it to early this year.

Embassy JV was planning to raise Rs 60 billion through the issue. The JV is planning to dilute 25 per cent in the issue. RMZ was also planning Reit. It has dropped its plans, as both the investors exiting the investments.

QIA, which has assets worth $335 billion globally, invested Rs 6 billion in RMZ in 2013. Baring had invested Rs 4.5 billion in 2012 and has 21 per cent stake in the company.