Oberoi Realty JV to issue conv pref shrs to Alpha Wave for INR 12.5 bln
This story was originally published at 17:46 IST on 20 March 2025
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-- Oberoi Realty JV to issue conv pref shrs to Alpha Wave for INR 12.5 bln
-- Oberoi Realty JV to issue conv pref shrs, or 21.7% stake, to Alpha Wave
NEW DELHI – Oberoi Realty Ltd. Thursday said its joint venture I-Ven Realty Ltd. will issue compulsorily convertible preference shares to Alpha Wave Ventures II LP for INR 12.50 billion. I-Ven Realty is a 50-50 joint venture between Oberoi Realty and its promoter Vikas Oberoi.
As per a securities subscription agreement between Oberoi Realty, Alpha Wave Ventures II, Vikas Oberoi and I-Ven Realty, the preference shares when converted will result in Alpha Wave Ventures II holding a 21.74% equity stake in the joint venture company. Apart from the issue of compulsorily convertible preference shares, I-Ven Realty will also issue 10 class A equity shares for INR 100.
In exchange for its investment, Alpha Wave Ventures II will have the right to appoint a nominee director on the board of I-Ven Realty and will have "customary veto rights in relation to critical matters", including operational and managerial matters, Oberoi Realty said in a filing.
Further, the securities subscription agreement restricts any sale of shares by Vikas Oberoi and Oberoi Realty in I-Ven Realty for five years from the closing of the transaction. Further, after the expiry of five years, Alpha Wave Ventures II will be entitled to an exit, including by way of a share swap whereby the investor would transfer its shareholding in I-Ven Realty to Oberoi Realty which, in turn, will issue on a preferential basis equity shares not exceeding 2% of the share capital to Alpha Wave Ventures II.
As a pre-condition to the investment by the investor in I-Ven Realty, Oberoi Realty and Vikas Oberoi will subscribe to I-Ven Realty's rights issue of non-convertible redeemable preference shares in equal proportion by Apr 30. The company will have to pay INR 1.65 billion for its part of the subscription to the rights issue. I-Ven Realty will utilise the proceeds of the redeemable preference shares to "primarily" repay outstanding loans availed by it from Oberoi Realty and Vikas Oberoi "as well as redeem the existing preference shares issued" by I-Ven Realty to the company and Vikas Oberoi.
Like Oberoi Realty, I-Ven Realty is also into the construction, development, and operation of real estate projects. The transaction with Alpha Wave Ventures II will not be a related party transaction, the company said in the filing.
On Thursday, shares of Oberoi Realty ended at INR 1,642.65, up 1.8%, on the National Stock Exchange of India. End
Reported by Rajesh Gajra
Edited by Saji George Titus
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