Citi arm to sell 5.89% BPTP stake
The Economic Times, February 06, 2009, Page 5

Ravi Teja Sharma NEW DELHI

CITIGROUP Property Investors (CPI), the real estate arm of Citigroup, is selling its entity-level investment in Delhi-based developer BPTP and is looking at SPV-level investments in the latter’s various projects.

CPI has a 5.89% stake in BPTP, which it had picked up in 2007 for Rs 322.50 crore but this stake does not give much control to them. According to a source working on the deal, and who did not want to be quoted, CPI is currently carrying out due diligence of some of BPTP’s projects in Gurgaon and Faridabad. The idea is to pick up controlling stakes in these projects, he added.

The promoters of BPTP are expected to buyback the 5.89% stake of CPI. Responding to an e-mail query from ET, CPI said it does not comment on speculations about specific transactions. “Our comment is ‘no comment’.” The source said: “CPI is looking at swapping its investment from the entity level to SPVs to gain more control.” CPI has invested in projects of BPTP in the past. It had bought a 40% stake in each of the four Special Economic Zones (SEZs) of BPTP for close to Rs 640 crore in April 2008.

BPTP had used the money raised to pay the first installment (Rs 1,300 crore) of the Rs 5,006-crore Noida land deal, which it bagged in March 2008. The economic slowdown has had an impact on the 95-acre Noida project and after the Noida Authority announced that developers had the option of stretching payment deadlines and renegotiating land areas, BPTP is learnt to have put in an application with the authority to allot them land worth the money already paid by them, minus the 10% penalty, as stipulated. BPTP had bagged the land at Noida after it outbid DLF, Omaxe, and Ansal API. The company has plans to build a commercial destination that would have offices, hotel and retail space. In July 2008, JP Morgan Chase had also invested Rs 250 crore in BPTP for a 3% shareholding.