Tuesday, 5 February 2013

Realty firm Hiranandani has offered to buy out its London AIM-listed investment arm Hirco Plc.

Realty firm Hiranandani has offered to buy out its London AIM-listed investment arm Hirco Plc.

"We made the offer (to acquire Hirco) a few months ago," Niranjan Hiranandani, Managing Director of Hiranandani Group.

He did not disclose the offer price, but according to sources close to the deal, "Hiranandani has offered to buy out Hirco for a consideration of 55 million pounds".

Hirco was started in London in 2006 as the investment arm of the Hiranandani Group with an aim to co-invest in large scale mixed-use township developments in suburban locations.

This is the second time that the city-based Group has offered to buy out the company. Hiranandani had made an offer of 100 million pounds to shareholders, which was rejected by the board last year, the sources said.

In October 2010, Hiranandani's estranged daughter, Priya, had reportedly filed arbitration proceeding against her father and brother Darshan, claiming that they had violated a business association agreement involving commercial rights to real estate projects.

The father and brother, however, made a counter claim, alleging that the fight caused them to lose out on business opportunities.

In December 2010, Hiranandani had resigned as Chairman of the England-listed firm citing corporate governance issues, while his daughter had ceased to be the director on the Hirco board from September that year.

Hirco, which had been reporting decline in profits, had said that merger of the interest of the members of the Hiranandani family would simplify its investment structure and improve transparency as a fully integrated development firm.

"The board continues to believe a merger of interests would also represent an obvious solution for Hirco and its shareholders, but only if on acceptable terms," it had said.

At present, Hirco has 66.4 million square feet in development at Hiranandani Palace Gardens mixed-use township projects in Chennai and Panvel ( Navi Mumbai). More details here

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