Citigroup Property Investors to invest $120 mn in Nitesh Estates’ luxury hotels business

New York-based Citigroup Property Investors (CPI) will invest around $120 mn in Bangalore-based Nitesh Estates’ luxury hotels. CPI would partner with Nitesh Estates on the latter’s forthcoming hotel properties. CPI reportedly also has committed itself to 30% in the group’s recently announced $100 mn 5-star hotel property on Bangalore’s Residency Road. Nitesh Estates is planning to build four more hotels in Goa, Chennai, Hyderabad and Kochi. The company is believed to have acquired land in Goa and is in the process of acquiring land in other locations. CPI has already invested close to $250 mn in India and plans to invest a further $500 mn. Of this, around 40% is expected to be invested in hotels and service apartments. Nitesh Estates had earlier received a PE funding of $100 mn from New York-based Siachen Capital for an undisclosed stake and was also known to have divested a 25% stake for $55-60 mn to New York-based hedge fund Och-Ziff Capital Management Group.

Read the Business Standard article.

SEBI prohibits Gammon Infrastructure IPO for a year

The Securities and Exchange Board of India (SEBI) has blocked the Rs. 450 crore-public offer of Gammon Infrastructure, restraining the company from tapping the capital markets for a year. This follows the December 21, 2006 order barring the parent company of Gammon Infrastructure, Gammon India from accessing the capital markets.

SEBI had stopped Gammon India and four others including promoter-chairman Abhijit Rajan and two companies controlled by him, from accessing the capital markets for a year for routing Gammon funds to subscribe to its rights issue in 2001. However, back then, it had not named Gammon Infrastructure Projects in the order. Gammon India will now appeal against the SEBI order with the Securities Appellate Tribunal (SAT). The SEBI has communicated to Gammon India that since the parent company holds significant stake in Gammon Infrastructure, the one-year prohibition on Gammon India would be applicable to Gammon Infrastructure as well.

At present, Gammon India holds 82.5% in Gammon Infrastructure, which following the IPO was supposed to come down to 20%. US hedge fund Och-Ziff also owns 12.5% in Gammon Infrastructure. The company is debt-free and has around Rs. 100 crores cash and sees no funding issues to delay its ongoing projects.

Read the article in Business Standard.