Structured Debt Raise for Real Estate

Client Background

The parent group involved in this transaction has a multi-dimensional portfolio of companies which operates in various business domains across the India. The core businesses of the group are security solutions, and mall/integrated facilities management. The group has also diversified into real estate development and service apartments.

About the Transaction

The said group was faced with some liquidity issues due to inadequate capital raising in the real estate projects, and capital generated in other group companies being used to fund the construction activities.

With the real estate market reeling from a slowdown, the group was looking for an immediate solution to get over the liquidity crunch and rightly finance its operating entities.

Problem Statement

Inadequate funding in real estate projects of the parent company and capital movement across entities leading to cash flow mismatches across the group.

Coinmen’s Role

  • Coinmen immediately leveraged the cash flows of the parent group’s 2 main operating entities and 1 of the real estate assets.
  • We provided structured funding to the entities from a state-owned NBFC to the tune of INR 200 million, providing much needed liquidity relief.
  • Subsequently, the entire debt at group level was re-engineered to get some prime assets released which were then used to raise funds at promoter’s level and many smaller loans were consolidated.
  • Once these issues were addressed and the group became comfortable, separate project finance was arranged for 2 running real estate projects.
  • The entire process involved careful planning and execution in steps, ensuring liquidity, lender’s comfort, swift switching of banks and leveraging on competitive terms. Coinmen raised more than INR 1250 million in the process from multiple lenders which included a mix of NBFCs, private and PSU lenders, and a large co-operative bank.

Outcome Of The Transaction

  • Fresh, long-term loans of INR 600 Million was raised for the real estate projects of the group, which solved liquidity issues across the group.
  • The existing debt costs had been reduced and the debt was consolidated.