Embassy group looks to raise Rs 1,600 cr debt
Embassy Group, which runs a real-estate investment trust (REIT), plans to raise Rs 1,600 crore of fresh debt through zero coupon bonds to fund new projects, refinance existing debt, and acquire a 5% stake in WeWork India from WeWork Global, sources close to the development told ET.
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Embassy’s closely held subsidiary, Serenesummit Realty, will be the vehicle to garner the funds, they said. The company is in talks with 360 One for the debt finance.
The pricing structure of the bonds includes potential upside from We Work India’s upcoming IPO, with a prepayment penalty pushing the final IRR to as high as 16%, sources said.
To secure the funding, the company has pledged 52.4% of We Work India shares held by Embassy BuildCon LLP (EBLLP), along with a personal guarantee from Embassy’s Jitendra Virwani, and a corporate guarantee from Embassy BuildCon LLP.
The bond will likely carry a three-year tenure, with repayment structured as a bullet payment at the end of the term. We Work India is expected to enter the IPO market within the next 12-18 months, following the IPO of Awfis and DRHP filing by SmartWorks. Embassy has informed investors that proceeds from the pre-IPO round will be allocated toward repaying the proposed bond financing.
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