Phoenix Mills to acquire balance 50% stake in its associate company; Stock dips 2%

21 Feb 2022 , 09:22 AM

Phoenix Mills Limited (PML) will make Classic Mall Development Company Limited (CMDCL) its wholly-owned subsidiary after buying a 50% stake from Crest Ventures Limited and Escort Developers Limited.

The company will pay Rs918 crore to acquire a 50% stake in CMDCL.

PML currently owns 50% in CMDCL and the balance 50% is owned by Crest Ventures (46.35%) and Escorts Developers (3.65%).

The company will fund the acquisition by way of internal accruals and cash on the balance sheet and complete this transaction either on its own and/or through one of its affiliates. Subject to completion of due diligence, certain condition precedents and necessary approvals from the board, the transaction is expected to close by April 2022.

CMDCL owns Phoenix Marketcity Chennai with chargeable area of approx. 1 million sft in Velachery, a prime consumption hub in the city of Chennai. This development is one of the largest malls in the city and is revolutionising the retail & entertainment experience in the city. The mall consists flagship stores of renowned brands, cafes and fine dining restaurants, food court with all major international and national brands, unmatched entertainment and leisure options with large well‐designed multiplex and Family Entertainment Center. Phoenix Marketcity Chennai generated an EBITDA of Rs1,579 million in FY20. For 9MFY22, it reported an EBITDA of Rs908 million. 

the company stock was under pressure during early trade on Monday. At around 9.24 am, Phoenix Mills Ltd was trading at Rs952 per share down by Rs20.7 or 2.13% from its previous closing of Rs972.70 per share on the BSE.