Mauritian firms to buy 60% in Forum Ventures

Mauritius-based Landmark Special Opportunities Company (LSOC) and Landmark Real Estate Fund (LREF) are picking up around 60% stake in Kolkata-based realty company Forum Ventures for close to Rs 100 crore, a person involved in the transaction said.

The transaction involves issue of 10 crore fresh equity shares and transfer of the same to the two Mauritius companies. While LSOC would invest a little over Rs 88 crore in the Forum Ventures, the other foreign equity partner, LREF, would pump in close to Rs 11.7 crore.

Both LSOC and LREF would make investments in Forum Ventures through their Mauritius-based subsidiaries, LSO Subco and LREF Subco, respectively, the person said. Forum Project Holding, a development company owned by the Forum Group, holds around 37% in the Forum Ventures.

Forum Project Holding is engaged in development of real estate, lease rental, property management and related activities.

While LSOC has invested around $75 million in various real estate projects in India, LREF has a total exposure of $ 9.3 million in Indian real estate sector. Forum Ventures would act as a holding company and use the foreign funds from the Mauritian investors for making downstream investments in the real estate sector including investment in Forum ETA Realty. Forum Ventures holds 26% stake in Forum ETA, which is planning to set up a information technology hub near Kolkata.

The investment by LSOC and LREF comes at a times when the real estate sector is facing fund crunch with buyers and investors shying away. Backed by large landbanks, the real estate sector commanded very high valuations till some time ago. However, the valuations of listed players have fallen drastically, following the crash in the stock market. Lower valuations have made PE players and international real estate funds more cautious with their investments in the realty sector.

Interestingly, some international real estate companies and funds have shown interest in small unlisted companies. Israel’s construction company U Dori Group is picking up a 50% stake in residential project in JV with Hyderabad’s Surana Group for Rs 125 crore.

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