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Economy

Embassy Office Parks to use proceeds from REIT to bring down debt

Updated : March 13, 2019 05:43 PM IST

Global investment company Blackstone-backed Embassy Office Parks is expected to use proceeds from the country's first real estate investment trust (REIT) to bring down the company's debt.

"The company would be raising Rs 4,750 crore and it’s a primary offering. The proceeds would be used to bring down the existing debt levels, which today is at 27-28 percent and that is expected to come down to sub 15 percent level, said Mike Holland, CEO, Embassy Office Parks.

Embassy Office Parks, joint venture of Blackstone and Embassy, has entered into unit subscription agreements with strategic investors to allot them 2,92,08,800 units for Rs 876.3 crore.

These investors are American Funds Insurance Series, New World Fund INC and SMALLCAP World Fund Inc, according to a regulatory filing.

The REIT issue will open on March 18 with a price band of Rs 299-300 per unit. The issue closes on March 20. The total issue size is 12,95,56,000 units.

The rationale behind this whole exercise to have fire-power at a later stage if necessary to take on debt for acquisitions, said Holland.
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