One of the shareholders of Aditya Birla Sun Life AMC has agreed to buy units of Aditya Birla Real Estate Fund – 1 to float an AIF, said a communication from Aditya Birla Sun Life AMC to its investors.
Aditya Birla Sun Life AMC (ABSL AMC) is a joint venture between Aditya Birla Capital and Sun Life (India) AMC Investments. The letter did not mention which entity would be providing the exit.
With this, the existing unit holders of the fund will be able to exit the fund.
ABSL AMC took this step, as it could not find investors at a mutually acceptable valuation to liquidate the investments under Aditya Birla Real Estate Fund – 1.
The letter said, “Significant efforts have been made in adverse market conditions to approach various financial institutions and other market participants for liquidation. Of the 10 financial institutions and other market participants approached, it received in-principle offers from only 2, and these provided for a valuation of about 25% lower than the value derived by an independent valuation agency.”
Now, to enable the exit to its investors, an AIF has been set up. The AIF will buy units of Aditya Birla Real Estate Fund – 1 from investors. The AIF will purchase these securities for an aggregate amount of Rs.368 crore, which is at premium of nearly 8% to the valuation obtained by the independent valuation agency. The letter said that Rs. 368 crore is considerably higher than the two in-principle offers that it had received.