Xander set to acquire stake in B'lore mall project for Rs 450 crore

Xander Group, the US-based private equity major with multi-billion dollar assets under management, is understood to be close to clinching a deal with a Bangalore-based developer for acquiring a significant stake in a commercial retail space being developed on the Bannerghatta Road for close to Rs 450 crore.

According to senior investment bankers, Xander Group is in advanced stages of discussions with the promoters of the Blue Horizon Hotels who are developing 0.42 million square feet of retail space under the brand Vega Mall. This move by Xander has been triggered after promoters of the project were not able to meet their debt obligations towards the State Bank of India to the tune of close to Rs 350 crore that they took as construction finance.
 

Post the default, the SBI had moved to recover the outstandings under the Sarfaesi Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Security Interest (Enforcement) Rules, 2002), and had called for e-auction of the project, which is being developed by the promoters.

"The process was initiated but now the promoters have said that they are in talks with private equity players to pay back our loans. We haven't yet decided on a final date as to when we want to close the issue. But, we certainly hope it will be signed soon," a senior SBI official said.

It is understood that the SBI had undertaken a price discovery mechanism and had arrived at a price of Rs 445 crore for the e-auction, but this was contested by the promoters in the High Court. The next hearing of this case has been scheduled for the first week of January 2014. The promoters of Blue Horizon and Xander could not be reached for their comments.

According to information available with Business Standard, the project is coming up over close to four acres of prime land with a total developable area of 1.3 million square feet of which 450,000 square feet will be for lease, while the rest will be for a hospitality project.

As and when Xander manages to finalise the transaction, it will mark its aggressive growth plans in the Indian market. According to information available, Xander has already invested close to $2 billion in India and is looking at a clutch of assets, including those of Shriram Properties and Nitesh Estates. While Xander is close to signing a $110 million deal with Shriram Properties to acquire a significant stake in an SEZ project in Chennai, the fund is in discussions with Nitesh Estates to fund a commercial development for Rs 300 crore. Xander also recently signed a deal with Mantri Developers to invest up to $100 million in a clutch of projects.