Mall developer Phoenix Mills has acquired stakes held by IL&FS in two of its entities Palladium Construction (30%) and Island Star Mall Developer (25%) for Rs 315 crore. The value at which IL&FS invested in the entities was not disclosed.
Mall developer Phoenix Mills has acquired stakes held by IL&FS in two of its entities Palladium Construction (30%) and Island Star Mall Developer (25%) for Rs 315 crore. The value at which IL&FS invested in the entities was not disclosed.
"We've signed definitive agreements to purchase 30% stake that IL&FS was holding in Palladium Construction, which is our Bangalore development company and 25% stake in Island Star Mall Developer, which is our mall company at Bangalore," said Pradumna Kanodia, director - finance, Phoenix Mills Ltd (PML) during its third-quarter fiscal 2015 earnings call on Monday.
The payments will be made over a staggered period of time till the last tranche is paid out in December of 2016. PML has already made payment of one installment each for both the transactions and is likely to repay around Rs 470 crore up to August 2016 that includes the stake buyouts as well as a few other obligations (stakes held by investors in Pune and Kurla developments).
Post this deal, both Phoenix Mills and Phoenix Hospitality will hold 100% in Palladium Constructions and Island Star. "The share transfer will happen towards July-August. However, after this transaction is completed Phoenix Mills will be directly hold 100% in Island Star," said Kanodia.
"While there is an assigned value, it's a combined deal that we have in both the parties and one has to look at it from that point," he said.
On the hospitality front, PML's hotel at Agra, Courtyard by Marriott, began receiving guests in the third week of January 2015. The company management is hoping to have strong momentum from this hotel as it move into a new financial year.
As for the status (management agreement with foreign hotel chain) of their flagship 384-room Palladium hotel atop the luxury Palladium mall at Lower Parel in Mumbai, Kanodia said, "We're very close to having all the definitive agreement signed and maybe in the next couple of weeks, hopefully, we should be able to announce the new operator."
In terms of timeline for the completion of the hotel, the PML management is making a few changes in order to conform to the brand standards of the new operator.
"We also have some serviced apartments and interiors related works needs to be completed. So it would take roughly three to four months in our own internal estimate to be able to have the entire inventory online for the hotel," said Kanodia.
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