DB Realty announces demerger of hospitality business

St Regis Delhi

DB Realty Ltd disclosed on Thursday that it plans to demerge its hospitality business through the incorporation of Advent International Ltd, as approved by its board of directors. This strategic move aims to streamline operations and unlock shareholder value.

The demerger scheme entails the establishment of Advent International Ltd as a wholly-owned subsidiary to facilitate the acquisition of DB Realty’s substantial interests in the hospitality sector. This includes equity stakes in renowned establishments such as the Grand Hyatt in Goa, Hilton in Mumbai, Marriott Marquis, and, among others, totaling over 3,263 keys.

In a press release, DB Realty highlighted that the demerger will enable a focused strategy for capital allocation, project execution, operations, and leadership, thus enhancing shareholder returns. Ernst and Young LLP (EY) has been appointed as an advisor to the Board for overseeing the demerger process.

Upon regulatory approvals, shareholders of DB Realty will receive equity shares of Advent International on the record date of the demerger, alongside retaining identical shareholdings in both entities. Post-demerger, Advent International will be publicly listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

This initiative follows the in-principle approval granted by the Board in February this year, signaling the company’s commitment to strategic restructuring. Concurrently, DB Realty has greenlit a proposal to raise INR 920 crore through Qualified Institutional Placement (QIP), intending to allot 356.66 lakh equity shares upon successful completion.

The company emphasized its robust financial performance, having completed three equity raises totaling approximately INR 2,470 crores within a span of fewer than two years. At 2:23 PM, shares of DB Realty surged by 3.27%, trading at INR 232.1 apiece on the BSE.

The demerger and subsequent listing of Advent International represent pivotal steps in DB Realty’s evolution, aligning with its vision to drive sustainable growth and maximize stakeholder value in the hospitality segment.

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