UB Holdings Eyes Sale of Commercial Real Estate to Blackstone, KKR
India's UB Holdings, controlled by liquor baron Vijay Mallya, is reportedly in discussions with prominent private equity funds Blackstone and Kohlberg Kravis Roberts (KKR) to divest some of its commercial real estate assets. The transaction, valued at approximately 6.5 billion rupees ($123 million), underscores the company's efforts to bolster its financial standings.
Background
UB Holdings is a subsidiary of the UB Group, which boasts a diverse portfolio including majority stakes in United Spirits and United Breweries, as well as the debt-ridden Kingfisher Airlines. The latter's quest for operational funding has likely precipitated UB Holdings' consideration of this sale.
The Asset in Question
At the center of these talks is the UB Tower in Bangalore, a prized commercial property currently occupied by esteemed tenants such as Apple, Citibank, and Yahoo. The property's attractiveness to potential buyers is evident, given its upscale location and the caliber of its existing tenants.
Response from UB Group
Contrary to the initial reports, a UB Group spokesman, quoting Vijay Mallya, has denied any plans to sell the UB Tower. However, Prakash Mirpuri, a spokesman for UB, has hinted at the possibility of other real estate assets being considered for sale, without providing immediate confirmation.
The Proposed Transaction Model
Sources close to the negotiations have indicated that UB Holdings and the private equity firms are exploring a sale-and-lease-back arrangement. This model would allow UB to retain occupancy rights, with the option to repurchase the property after a stipulated period.
Reactions from Interested Parties
While a Blackstone spokesman declined to comment on the matter, KKR was unreachable due to a local holiday in India at the time of inquiry. The outcome of these discussions remains to be seen, as the parties involved navigate the complexities of this potential transaction.