Prestige Estates has concluded phase one of its deal with Blackstone which involves transfer of annuity assets with enterprise value of about Rs 7,470 crore out of the total deal EV of Rs 9,160 crore.
CLSA said this is estimated to result in transfer of debt of Rs 4,590 crore out of Prestige Estate’s balance sheet and net proceeds of Rs 2,100 crore net of taxes to Prestige.
The brokerage expects the net debt to decline to Rs 1,900 crore from a pre-deal level of Rs 8,500 crore.
“Management plans to use net proceeds for capex and new project acquisition. With large, mature assets being transferred in this deal, the portfolio churn is likely to be value-accretive,” said CLSA.
“With leverage concerns addressed and improved outlook on growth driven by adequate liquidity, we believe the stock warrants rerating,” the brokerage said.
