AIM-listed Trinity Capital PLC will auction its interest in a planned mixed-use development project - formerly known as MK Malls - in the Bandra Kurla Complex (BKC), after attempts to seal a deal with property developer DB Realty did not progress.
"Trinity Capital PLC will offer at auction its interest in a planned mixed-use development (formerly known as MK Malls) in Bandra Kurla Complex, a prime business district in Mumbai, India. Bidders who participate in the auction will offer to purchase the company's Mauritian subsidiary, Trinity Capital Mauritius Ltd (TCML)," Trinity Capital said in a filing.
The company will offer its interest in TCML in a sealed envelope auction with unconditional bids to be received no later than September 23, 2017, it further added.
Emails sent to DB Realty officials did not elicit any response at the time of publishing.
Trinity Capital holds interest in the project through its wholly owned subsidiary Trinity Capital Mauritius Ltd (TCML), which through its investment in Trinity Capital (Ten) Ltd (TC-10), is entitled to receive all cash flows from preference shares issued in connection with the planned mixed-use property development project.
TC-10 paid Rs 100 crore for the compulsorily convertible preference shares in 2007. The likely sources of TC-10's returns are sale of shares, cash generated by DB (BKC) from its underlying project in BKC, and/or liquidation proceeds. Development of the project, however, has not yet commenced.
About two years ago, TC-10 agreed in principle to sell its entire holding of compulsorily convertible preference shares to DB Realty Ltd for Rs 43.89 crore (approximately £5.3 million).
"Although a draft sale and purchase agreement had been negotiated between TC-10 and DB Realty Ltd., that agreement was not signed and the sale has not been consummated. DB Realty Ltd has regularly confirmed its interest in completing in due course the sale and purchase of the shares on the agreed terms. However, this has not occurred and there is no assurance that this or any other sale and purchase will complete," Trinity Capital PLC said.
Following completion of the sale of TCML, the Trinity Capital PLC Board expects to effect a further distribution to shareholders and convene a shareholder meeting seeking approval to delist the company's shares from trading on AIM, among others.
TC-10 holds investments in DB (BKC) Realtors Private Ltd, an Indian special purpose property development company, which owns the rights to develop the mixed-use commercial project in BKC, Mumbai. DB (BKC) is controlled and managed by DB Realty Ltd. TC-10 is 12% owned by TCML and 88% owned by two German property investment funds (the Immobilien Funds), Trinity Capital PLC said in a bid document.
TCML's interest in TC-10 entitles it to receive all cash flows received by TC-10 from its holding of compulsorily convertible preference shares (CCPS) issued by DB (BKC).
AT HALF THE VALUE
- TC-10 paid Rs 100 cr for the compulsorily convertible preference shares in 2007
- Development of the project, however, has not yet commenced
