Varde Partners in talks with Embassy to extend Rs 900-crore loan

US fund manager Varde Partners is in talks with Bengaluru-based property developer Embassy Property Develop­ments to extend a loan of Rs 900 crore, according to a source.
 
“Embassy plans to use the funds to churn debt and reduce the cost of funds,” said the source.
 
Embassy is also completing the process of merger of certain housing and commercial projects of Indiabulls Real Estate.
 
Varde is also in talks to lend about Rs 1,200 crore to Hyderabad-based Phoenix Group, said the source.
 
When contacted, Varde Partners spokesperson declined to comment. Embassy Chairman Jitu Virvani said the company is undecided on the offer given by Varde.
 
Earlier, Varde’s plans to acquire the commercial properties of New Vernon in Noida and Gurugram hit a roadblock as the investment committee of the former did not clear the plan.
 
Varde Partners announced a partnership with Aditya Birla Capital in 2018 to invest in distressed investment opportunities and special situations.
 
Many global investors like Varde, CPPIB, Baring Private Equity Asia and others are betting big on the credit space in the country due to lower disbursals by banks and non-banking financial companies (NBFCs).

 
They believe Covid-19 would increase the demand for credit in the country.
 
Haseeb Malik, partner and head of Asia, corporate and traded credit at Värde Partners, recently told Business Standard, “Coming into the pandemic, India was trying to resolve more than $200 billion of non-performing loans in its banking system, alongside extreme volatility in the country’s $300-billion NBFC sector, leaving borrowers with fewer options to plug the gap. The additional impact of Covid-19 has led to an even greater demand for alternative credit, with the opportunity to lend and support good quality business.”
 
Embassy and its partner Blackstone floated a real estate investment trust (REIT) and listed it in 2019. Embassy recently launched a commercial office platform with Canada’s Ivanhoe Cambridge to invest in office properties in the country. The $500 million platform will be a 80:20 one between Ivanhoe and Cambridge.
 
Varde acquired the Lodha Excelus building in Wadala area (Mumbai) from Lodha Developers last year. Varde opened its office in Mumbai in 2018 and invested over $1 billion in the country.