Manyata Promoters to Raise Rs 750 crore from ECL Finance

January 06, 2016

Bengaluru-based Manyata Promoters , one of the biggest land owners in the city, is raising Rs 750 crore from ECL Finance, the non-bank Finance arm of Edelweiss Group, three people aware of the deal said.  

"Part of the money will be used to clear debt that the company had taken to buy land and for general business purpose two years ago from some private equity funds and builders in the city," one of the people said. Part of the proceedings will be used also to purchase land, the person added, speaking on the condition of anonymity.

Reddy Veeranna's Manyata, one of the shareholders of the 110-acre Manyata Embassy Business Park in north Bengaluru, had taken loans at an interest rate of 24% from the Embassy Group and US private equity firm Blackstone.

The business park, the country's largest operational tech SEZ, was a joint venture between Bengalurubased Embassy Property Development and Reddy. In 2011, Blackstone picked a 37% stake in the property for more than Rs 1,000 crore.

Manyata has returned around Rs 360 crore to Embassy Group and Blackstone, said a second person. "Reddy still needs to pay around Rs 160 crore to Embassy Group as the company was unable to service the loan."

Veeranna owns more than 500 acres across Bengaluru. An email questionnaire sent to Edelweiss did not elicit any response, while Veeranna did not respond to multiple phone calls and text messages. The Embassy Group declined to comment on repayment of the loan.

Over the past one year or so, several builders across the country have raised significant capital from non-bank finance companies to refinance high-cost debt they have taken earlier or finish last-mile construction.

In a recent transaction, Piramal Fund Management and Clearwater Capital's NBFC Altico Capital agreed to invest Rs 725 crore in a project portfolio of Bengalurubased Century Real Estate. A part of this will be used by the builder to provide Kotak Realty Fund an exit valued atRs 375 crore from its portfolio of three projects.

Gurgaon-based Orris Infrastructure raised Rs 325 crore from IndoStar Capital, issuing unlisted non-convertible debentures to the NBFC. A part of the proceeds was used to prepay Rs 200 crore to Xander and Rs 65 crore to Religare, both of which had put in high-cost money earlier. Another company, Ghaziabadbased Saya Group, raisedRs 200 crore from Edelweiss.

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