NCLT directs Indiabulls Real Estate to hold shareholder meeting to discuss Embassy One merger

The National Company Law Tribunal (NCLT) has directed realty developer Indiabulls Real Estate to convene a meeting of its shareholders to discuss and seek their approval on its proposed merger with Embassy Group entities NAM Estate and Embassy One Commercial Property Developments.

On February 12 the meeting to be held on video conference or any other audio-visual medium will be chaired by the NCLT appointed chairperson.

This is the last hurdle to be cleared by the company for the proposed merger that would result in Indiabulls Group’s complete exit from real estate business and a reverse listing for Embassy.

The proposed merger between Embassy Group and Indiabulls Real Estate has already entered the final lap as both the companies had filed the requisite joint application with the jurisdictional bench of NCLT, for its approval to the scheme of merger. The application for approval of merger with NCLT was listed in the current quarter.

The merger has already received a nod from the Competition Commission of India (CCI), the stock exchanges, and the Securities & Exchange Board of India (SEBI).

The combined entity will be renamed as Embassy Developments Ltd and will be co-headquartered in Mumbai and Bengaluru.

Following the completion of the merger, the combined listed entity will be 44.9% owned by Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing IBREL promoter group and around 19.1% by the Blackstone Group and other Embassy institutional investors.

Embassy Group already holds 14% of listed Indiabulls Real Estate and once the merger gets concluded later this year it will become the promoter of the combined entity.

Indiabulls Real Estate has already announced resignation of Chairman and Non-Executive Director Sameer Gehlaut with effect from December 31, 2021. Gehlaut will be focusing on business of providing technology-enabled transaction finance and primary healthcare services by Dhani Services, of which he is the founder Promoter, Chairman and CEO.

The merger will be a cashless structure as Embassy subsidiaries–NAM Estates and Embassy One Commercial Property Developments–will swap shares with Indiabulls Real Estate.

According to the terms approved by boards of both the merging entities, Indiabulls Real Estate shares were valued at Rs. 92.5 per share and shareholders of Embassy subsidiary NAM will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM. And Embassy One Commercial Property Developments shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares .The merger is expected to provide diversification to the listed company’s shareholders through a balanced mix of residential and commercial development with visibility on near term liquidity.

Indiabulls Real Estate has reported consolidated net profit of Rs 5.65 crore for the quarter ended September as against net loss of Rs 76.01 crore a year ago. Total income rose 652% on year to Rs 381.25 crore. The company’s sales rose to Rs 874 crore for the half year ended September from Rs 368 crore a year ago, while collections for the period rose to Rs 654 crore against Rs 284 crore.