Phoenix Mills, GIC team up for mixed-use retail platform
Shares of Phoenix Mills traded 10% higher at Rs 765.80 on the NSE in early morning deal on Wednesday after the company said that the listed company and few of its SPVs have signed a non-binding term sheet with GIC Private Equity (PE) for the formation of a retail-led mixed-use platform.
The Phoenix Mills and its subsidiaries, Offbeat Developers Pvt Ltd, Graceworks Realty and Leisure Pvt Ltd and Vamona Developers Pvt Ltd, have jointly signed a non-binding term-sheet with an affiliate of GIC Pvt ltd (‘GIC’), for formation and development of a strategic retail-led mixed-use platform.
\The consummation of this transaction would be a big positive for Phoenix Mills with improved cash flow situation and endorsement in the quality of its assets with premium valuations.
Phoenix Mills is building a huge war chest for the next leg of growth, deal proceeds and QIP fund will create a war chest for new acquisitions.
The fund infusion by GIC will be utilised as growth capital for further expansion and acquisition of greenfield, brownfield, operational and or distressed mall opportunities. The parties may also consider various options of monetising this platform, including through a REIT over a three to five years from the closing of the proposed transaction.
Phoenix Mills will contribute retail assets Phoenix Marketcity Mumbai and Phoenix Marketcity Pune, and the commercial assets Art Guild House, Phoenix Paragon Plaza and Centrium, Mumbai as a part of the platform. Together these assets, which are held by the PML subsidiaries, constitute a retail gross leasable area of 2.33 million square feet and office area of 1.03 million square feet, the filing said. The assets had a net operating income of about Rs 370 crore in FY20.
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