Allcargo Logistics Concludes Deal To Sell Part Of Its Logistics Parks Business To Blackstone
Blackstone will own 90% of these logistics parks while the remaining 10% will continue to be with Allcargo Logistics.
Allcargo Logistics on Thursday said it has concluded the deal to sell a part of its logistics parks business to global private equity giant Blackstone, making the company cash positive.
Allcargo Logistics said this is in line with the agreement signed earlier, which has now been consummated with the signing of the share purchase agreement.
As part of the deal, Blackstone will own 90% of these logistics parks while the remaining 10% will continue to be with Allcargo Logistics and will get demerged into TransIndia Realty under the ongoing scheme of demerger, the company said in a statement.
"Allcargo will have cash infusion, conversion of OCDs and eliminate debt for the transferred entity, creating an impact of over Rs 400 crore on the net debt. With the closure of the transaction, Allcargo's consolidated net debt will fall below zero and the company becomes cash positive", it said.
The company has built 5.5 million square feet of Grade A logistics parks across the National Capital Region (NCR) Delhi, Bengaluru, Hyderabad and JNPT in Mumbai Metropolitan Region (Mumbai).
The assets in Bengaluru and Hyderabad along with the parks in Goa will get transferred under this transaction, while NCR, Hosur and MMR region will continue with the company, Allcargo said.
Post-demerger, the new real estate company also has projects in the planning stage for another approximately 8.6-million square feet of space, which will be pursued in the new entity on its balance sheet, the company added.
"The agreement with Blackstone brings closure to a well-planned strategic initiative and demonstrates our commitment towards stakeholders, especially on the successful completion of marquee warehouses, leased to top tier customers", it noted.
This closure of the deal also aligns with the company's corporate strategy of being an asset-light organisation at the Allcargo Logistics level and will enhance the returns on capital employed, the company said.
"We will continue to move forward with our broader strategic mandate of being an asset-light digital company with huge potential to grow in India as well as globally at Allcargo Level, while the real estate business will find new vision and progress under the soon-to-be demerged entity TransIndia Realty", said Shashi Kiran Shetty, founder and Chairman of Allcargo Group.