Prestige Estates surges 8% on acquisition of stake in group company

The stock was 8% to Rs 324 on the BSE in noon deal after the company announced that it will acquire 66.66% stake in a group company, Prestige Projects, for Rs 324 crore.

Prestige Estates Projects has moved higher by 8% to Rs 324 on the BSE in noon deal after the company announced that it will acquire 66.66% stake in a group company, Prestige Projects, for Rs 324 crore.

Prestige Estates Projects currently holds 33.34% stake in Prestige Projects (PPPL), an associate of the company. PPPL is in the business of real estate development and owns a land parcel admeasuring over 180 acres located in Sarjapur road, Bengaluru.

The company is proposing to develop a large scale affordable and mid income housing project (approximately over 7.5 million square feet of developable area) comprising of apartments, villas and plots along with various lifestyle amenities and necessary social infrastructure such as retail shopping malls, sports facilities etc. in this land, Prestige Estates Projects said in a statement.

PPPL has not registered any business turnover for the last three financial years, as the project is under various stages of planning and regulatory approvals.

Prestige Estates Projects through a wholly-owned special purpose vehicle (SPV) is in the process of acquisition of 66.66% equity stake in PPPL from the investors and land owners for a consideration of approximately Rs 324 crore. The acquisition is expected to be completed before 31 January 2018. Currently, investors hold 33.33% stake and land owners hold 33.33% stake in PPPL.

The transaction is in the ordinary course of business and is being done at arm's length. The above said proposal is being mooted for business reasons.