Realty firm to buy-back nearly 12% stake from JP Morgan, CPI India

Realty firm BPTP on Tuesday said its promoters will buy-back nearly 12% stake held by private equity firms JP Morgan and CPI India (an affiliate of Citigroup Property Investors) for Rs 693 crore.

The Gurgaon-based developer also said it has completed the deal to sell its IT Park BPTP Crest in Gurgaon to Bengaluru- based RMZ Corporation for an enterprise value of about Rs 850 crore.

The fund raised from the sale of the IT park will be utilised to give exit to JP Morgan Chase and CPI from the company.

Part of the fund will be used to provide complete exit to global investment firm Blackstone Group, which has some stake in this IT park.

"The promoters, company, CPI and JP Morgan have now reached a comprehensive amicable settlement. The promoters have agreed to buy out CPI's shareholding for approximately Rs 333 crore (payable over a period of time) and JP Morgan's shareholding for approximately Rs 360 crore (payable over a period of time)," BPTP said in a statement.

BPTP had raised Rs 322 crore in 2007 from CPI India, a Citigroup fund, now managed by Apollo Management, by selling 5.67% equity stakes in the company.

In 2008-09, the realty firm further raised Rs 241 crore in two rounds of funding, from Harbour Victoria Investment Holdings, a subsidiary of JP Morgan Chase group of companies, by selling 6.21% stakes in the company.

"To fund the exit, the company has sold its IT Park in Gurgaon known as 'BPTP Crest' located on NH-8 to Bengaluru based real estate company RMZ Corporation at an enterprise value of about Rs 850 crore," the statement said.

Through the sale of IT Park, BPTP will also give complete exit to the Blackstone Group, which had invested in this asset in 2007. IT Park has leased area of about 7 lakh sq ft.

"Post giving exit to three of our investors, we now are fully focused on completing all our projects at the earliest by raising construction loans through banks/financial institutions," BPTP spokesperson Rohit Mohan said.

The company also plans to sell some of the non-core assets to raise funds for meeting business requirements, he said.

BPTP, which is facing issues with customers due to delays in project completion, also assured the buyers that it will fulfil the promise of delivering the housing complexes.

Initially, BPTP had plans to give exit to CPI and JP Morgan through Initial Public Offering (IPO). The company had filed for its draft red herring prospectus in December 2009 and received Securities and Exchange Board of India's (Sebi) approval in May 2010.

However, BPTP could not launch its IPO due to poor market conditions in the aftermath of the global economic meltdown. Since the public offering was not completed, CPI and JP Morgan initiated arbitration proceedings against the company and the promoters.

BPTP is developing various projects in Faridabad, Noida and Gurgaon.