Embassy REIT launched the program to simplify its ownership structure by reducing share ownership levels and increasing the dividend component of its unitholders.
Michael Holland, President and CEO of Embassy REIT, said: “We are delighted to deliver on our commitment to complete this key restructuring exercise within the target timeframe of March 2021. This milestone allows us to significantly increase the component dividends as a proportion of our overall quarterly distributions. Since REIT dividends are tax-free, this restructuring is expected to have a positive impact on distributions to the benefit of our unitholders. We continue to focus on creating long-term value to maximize returns for our unitholders ”
As part of this program, the 5.5 million square foot Embassy TechZone asset in Pune will be de-merged from Embassy Office Parks Private Limited (EOPPL) into Embassy Pune TechZone Private Limited (EPTPL), which will be 100% owned. by Embassy REIT.
EOPPL will be merged with Manyata Promoters Private Limited (MPPL) and as a result, MPPL will be 100% owned directly by Embassy REIT, thus collapsing the two-tier shareholding structure for MPPL which owns its largest development of $ 14.8 million. square feet.
The Plan of Arrangement will come into effect once the required filings and approvals are made with the Registrar of Companies and the Special Economic Zone Approval Board.
Embassy REIT announced the acquisition of a few properties (Manyata in Bangalore and TechZone in Pune for Rs 474 crore, collective space of 20.3 msf) last October.
The Embassy Office Parks Management Services board, director of Embassy REIT, at its board meeting said a distribution of Rs 431 crore for the third quarter of fiscal 2021. This translates to a distribution per unit of Rs 4.55 for the third quarter on the basis of units enlarged by 947.89 million units, after the issuance of 176.23 million new units in December 2020 as part of the acquisition of Embassy TechVillage.
The distribution record date is February 22, 2021 and the distribution will be paid no later than February 27, 2021. The company said its balance sheet remains strong with low leverage of 23% net debt on TEV, liquidity of Rs 940 crore and additional debt margin of Rs 12,000 crore.
Embassy REIT owns and operates a 42.4 million square foot portfolio of eight infrastructure-style office parks and four downtown office buildings in the Bengaluru, Mumbai, Pune and NCR office markets. Embassy REIT’s portfolio includes 32.3 million square feet and some strategic amenities, including two operational business hotels, four hotels under construction and a 100 MW solar farm.