Page 38 - Kolte Patil AR 2019-20

#6 Greater ownership

We increased our

economic interest in the

landmark Life Republic

property

In the business of real estate, a cash-light approach by
construction companies is achieved through the divestment of
project ownership in favour of external companies. During the
year under review, Kolte-Patil reversed this industry approach
through the buyout of equity ownership by external holders in
Life Republic, its landmark project, sending out an unmistakable
signal of commitment, prospects and profitability

Overview India Advantage Fund-III (IAF-III) and India
During the year under review, Kolte-Patil Advantage Fund-IV (IAF-IV) managed by ICICI
completed the ownership of 95% all economic Venture Funds Management Company Limited
interest in Life Republic to enhance ownership (ICICI Venture) in the flagship Life Republic
and profits from property development and township project.
shareholder value. The buy-out consideration was of C210 Crore
This buyout sends out signals: that KPDL is to be paid in three tranches of C70 Crore each.
optimistic of development prospects, believes Two tranches have already been paid largely
that the property has acquired critical maturity through internal accruals. The third tranche
for accelerated development, returns could shall be paid in FY21. Besides, 12 acres of land
far exceed returns from treasury operations in Life Republic, with FSI required to achieve
(assuming that the Company’s financial the saleable area equivalent to 1.4 million
resources were retained in cash) and there is square feet, will be allocated to IAF III and
attractive revenue visibility from this project. IAF IV (managed by ICICI Venture) upon the
project obtaining an FSI of 1.0 (present 0.5).
Fine print In a decisive post-Balance Sheet development
KPDL entered into a share purchase (April, 2020), the Company undertook strategic
agreement to buy-out the 50% stake held by

36 | Kolte-Patil Developers Limited