India

Oaktree Capital invests INR 250 crore in Twenty-Five Downtown Realty

PNT Reporter | Last Updated : 29th Mar, 2024

Synopsis

Twenty-Five Downtown Realty secured INR 250 crore from Oaktree amid a dispute involving DLF and Shapoorji Group, alleging collusion to gain control. Denying allegations, Hubtown, PNB Housing, and Omkara ARC are embroiled in a legal battle. The funds, raised through secured non-convertible debentures, aim for general corporate use and project costs. Bonds are backed by Hubtown promoters. The controversy centers on ownership, with Twenty-Five Downtown allegedly controlled by Hubtown. It won a significant slum rehabilitation project but defaulted on loans, leading to Omkara ARC acquiring shares. Despite objections, shares were transferred to Twenty-Five South Realty, with ongoing court proceedings.

Amid ongoing disputes with DLF and Shapoorji Group, Twenty-Five Downtown Realty secured INR 250 crore from Oaktree Capital. The allegations center on a collision involving a Hubtown-linked entity, Omkara ARC, and PNB Housing Finance to gain control. Denials from Hubtown, PNB Housing, and Omkara ARC accompany the legal proceedings in the Delhi High Court.

The funds were raised through secured non-convertible debentures maturing in 2026. NSDL disclosures indicate the funds' allocation for general corporate purposes and project approval costs. Hubtown promoters guarantee the bonds, reinforcing their commitment to the venture.

At the heart of the dispute lies DLF and Shapoorji Pallonji's contention that Twenty-Five South Realty, linked to Hubtown, clandestinely gained control of Twenty-Five Downtown Realty. Originally a three-way joint venture, Twenty-Five Downtown Realty secured a mandate from Maharashtra's slum rehabilitation authority for a substantial project in south Mumbai. This project promises significant free sale area upon providing housing for slum dwellers, valuing over INR 10,000 crore.

To finance the project, Twenty-Five Downtown Realty availed an INR 800 crore loan from PNB Housing Finance, pledging its stake and land. Defaulting on payments led to loan auctioning, won by Omkara ARC. This new lender invoked equity pledges, prompting legal action from DLF and Chinsha Property, citing selective invocation by Omkara ARC.

DLF's attempts to acquire Hubtown and Shapoorji Pallonji's stake were thwarted when PNB Housing sold the loans to Omkara. Subsequently, Omkara disclosed the sale of shares to Twenty-Five South Realty, a joint venture between Hubtown and Redfort Capital. Nitant Real Estate Pvt Ltd acquired the majority stake held by Hubtown, alongside 100% preference shares.

In a recent development, a Shapoorji Pallonji Group company withdrew its objection to the shares' transfer to Twenty-Five South Realty, coinciding with ongoing legal proceedings.

This sequence of events underscores the complex financial and legal entanglements surrounding Twenty-Five Downtown Realty's fundraising and ownership disputes. While the Oaktree investment injects capital into the company, the underlying allegations and legal battles raise questions about corporate governance and control. The involvement of prominent entities like DLF, Shapoorji Pallonji, and PNB Housing Finance adds layers of complexity to the situation.

As the legal proceedings continue, stakeholders await resolution, seeking clarity on ownership and control of Twenty-Five Downtown Realty. The outcome of these disputes will not only impact the company's future but also set precedents in the realm of corporate governance and legal accountability.

Next (Indore aims to recover taxes through a land auction worth INR 23 crore ending on 31st March)

India

Oaktree Capital invests INR 250 crore in Twenty-Five Downtown Realty

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