Yesterday night, Phoenix Mills said that its subsidiaries have jointly entered into an agreement with an affiliate of GIC.
This non-binding agreement is for formation and development of a strategic retail-led mixed use platform.
GIC will invest in the subsidiaries by way of a combination of primary infusion and secondary purchase of equity shares – it will initially acquire an equity stake of 26%; the parties to the transaction may mutually agree for GIC to further increase its stake up to 35% within a 12 month period from the closing of the Proposed Transaction.
Phoenix Mills will contribute the following retail assets : Phoenix Marketcity Mumbai and Phoenix Marketcity Pune and the following commercial assets: Art Guild House, Phoenix Paragc,n 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 (GLA) of approximately 2:33 million square feet ('msf') and office GLA of approximately 1.03 msf, aggregating to GLA of 3.36 msf with FY20 net operating income of approximately Rs. 370 crore.
The proceeds from the proposed transaction are intended to be utilized as growth capital for further expansion and acquisition of greenfield, brownfield, operational and/or distressed mall opportunities. Parties may consider various options to monetize this platform, including by way of a REIT, over a three to five-year period from the closing of the Proposed Transaction.
On this news, the stock price has shot up like a phoenix – currently up over 12% at Rs.774, with volumes more than doubling up. Its 20% UC for today is at Rs.827.45.