Godrej Properties cancels deal with DB Realty

New Delh: Real estate firm Godrej Properties has decided to cancel its plans to invest Rs 700 crore in DB Realty to acquire 10 per cent stake and set up a joint platform amid concerns raised by minority shareholders and other stakeholders.

On Thursday, Godrej Properties had announced that it would invest Rs 400 crore to acquire around 10 per cent stake in DB Realty and another Rs 300 crore to set up a joint platform for undertaking slum redevelopment project. When asked whether the investment deal with DB Realty has been cancelled, Godrej Properties Ltd Executive Chairman Pirojsha Godrej replied in affirmative. "We've decided against going ahead post the feedback we received from various stakeholders including our minority investors," Pirojshasaid .

"There were concerns with the structure of the investment as well as with the slum redevelopment business in general," he added. As per the proposed deal, the total size of the joint platform between Godrej Properties and DB Realty was Rs 600 crore, with each party contributing Rs 300 crore. Mumbai-based Godrej Properties Ltd (GPL), one of the leading developers in the country, had proposed to invest a total of Rs 700 crore.

In a regulatory filing on Friday, GPL said that the company received substantial feedback and views from its stakeholders and minority investors raising concern on the proposed transaction with DB Realty. The concerns were with respect to the structure of the deal, rationale for the investment in DB Realty Ltd and merits of investing through the platform. To consider and discuss the feedback and the concerns raised by stakeholders, the Board met on Friday and deliberated on the same.

"After prolonged discussions and taking into consideration the feedback from the stakeholders and minority investors, the board has decided not to proceed with any further evaluation of potential investment in the equity capital of the DB Realty and the platform," the filing said.

The board has authorised the company to engage with DB Realty with regard to the same, including to ensure appropriate and timely dissemination of this information by DB Realty Limited to its shareholders.