Embassy Office Parks Management Services, manager of Embassy Office Parks Real Estate Investment Trust (Embassy REIT), has received board approval to raise debt up to Rs 2,000 crore. The move, aimed at optimizing the existing debt structure, involves the issuance of 1,00,000 secured non-convertible debentures valued at Rs one lakh each, generating an anticipated Rs 1,000 crore. Additionally, the REIT plans commercial paper issuances totalling Rs 1,000 crore, in a phase-wise manner. By diversifying financial instruments, and emphasizing long-term stability in its real estate investment portfolio, Embassy REIT is aiming for a sustainable future.
To strengthen its financial position, Embassy Office Parks Management Services, the managing entity of Embassy Office Parks Real Estate Investment Trust (Embassy REIT), announced the board's approval for raising debt up to Rs 2,000 crore. The decision, outlined in a recent BSE filing, aims to streamline the REIT's existing debt structure.
The board's debenture committee greenlit the issuance of 1,00,000 listed, rated, secured, and redeemable non-convertible debentures by Embassy REIT on a private placement basis. With a face value of Rs one lakh each, this move is anticipated to generate an aggregate amount of Rs 1,000 crore. The debentures come with a term of 19 months and 28 days from the deemed date of allotment.
Additionally, Embassy REIT plans to tap into the commercial paper market with two distinct tranches. The first, a Rs 250 crore issuance, spans five months and six days from the deemed date of allotment (CP Tranche I). The second, a larger Rs 750 crore issuance, extends over a 12-month period (CP Tranche II). Notably, the committee emphasised that the total amount raised through commercial papers, including those of Embassy REIT's Special Purpose Vehicles (SPVs) and Holdco, should not surpass 10% of the consolidated outstanding debt.
This move follows the board's January 25, 2023 decision approval for raising debt up to Rs 5,100 crore for any purpose. The current step seems focused on optimizing the debt structure, a proactive measure to manage financial obligations more efficiently.
Embassy REIT's commitment to strategic debt management reflects a nuanced approach to financial sustainability. By diversifying instruments and managing maturities, the REIT positions itself for a robust financial future.
Investors and industry observers will undoubtedly keep a keen eye on the successful execution of these financial measures, as they unfold in the coming months. The decision underscores Embassy REIT's commitment to navigating the financial landscape strategically and ensuring the long-term stability of its real estate investment portfolio.
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