Singapore’s GIC to take control of Nirlon in Rs1,250-cr deal

Singapore sovereign wealth fund GIC plans to take control of India's Nirlon Ltd, in a deal worth an estimated Rs1,250 crore ($197 million), the companies said on Tuesday.

Rico Berry, an affiliate of GIC, has signed definitive agreements to acquire about 34.2 per cent stake in Nirlon. In addition, it will make an open offer to Nirlon's public shareholders for an additional 28.4 per cent stake for a complete takeover of the company as per Sebi norms.

The price being offered is Rs222 per share. Assuming a full take-up of the open offer, Reco Berry will hold 62.6 per cent of Nirlon.

Separately, Reco Berry has also entered shareholder agreements to purchase up to 4.5 million shares from Alfano Pte Limited, Deltron Pte Limited, Kunal V Sagar and Rahul V Sagar, the existing promoters of Nirlon, for the same price, in aggregate representing 5 per cent shareholding in Nirlon.

It is also in discussions with certain other shareholders to acquire up to 1.8 million equity shares, constituting about 2.0 per cent shareholding in Nirlon.

Nirlon, listed on the Bombay Stock Exchange, owns Nirlon Knowledge Park (NKP). NKP is a large-scale, high quality information technology office park located in Mumbai.

Loh Wai Keong, managing director & co-head Asia, GIC Real Estate Pte Ltd, said, "Nirlon has created a high quality asset and we are excited about supporting the next phase of growth and asset enhancement to build sustainable value for this development.

We look forward to working closely with the Sagars and their management team. This acquisition is consistent with our strategy in India to invest in assets that generate stable income streams over the long term."

Founded in 1950s, Nirlon Ltd was engaged in manufacturing of nylon filament yarn. It later ventured into making industrial rubber products.

In the 1980s Nirlon was declared a sick unit following the deterioration of the textile business. In 2006, the company decided to utilise its land parcel in Goregaon suburb of Mumbai to develop an IT park on 23 acres prime land.
 
For the Singapore fund, this the second real estate transaction in India in less than a week's time  after last week's signing of a a joint venture with Delhi-based realty developer Vatika Group to develop two residential projects in Gurgaon.

Nirlon shares closed at Rs193 in the Bombay Stock Exchange on Tuesday, ahead of the announcement.