CapitaLand sells 49% stake in Indian JV for S$30 mln

By KALPANA RASHIWALA


CapitaLand said on Tuesday that it will sell its entire 49 per cent stake in Runwal CapitaLand India for about Rs 1.02 billion (S$30 million) in cash to India's Runwal group, which owns the remaining 51 per cent stake in the joint venture company.

Runwal CapitaLand, a company incorporated in India, is developing The Orchard Residency, a 590-unit freehold residential project located at Ghatkopar in Mumbai.

'CapitaLand and Runwal have worked closely together towards the successful launch and implementation of the project. The divestment is consistent with CapitaLand's active capital management, and enables early recycling of capital ahead of the project completion,' CapitaLand said in a statutory filing with Singapore Exchange.

'India remains a market with good potential given its huge population and strong economic growth. CapitaLand remains open to new investment opportunities in its core segments,' it added.

The consideration was arrived at on a willing-buyer willing-seller basis, taking into account, among other factors, the value of sold units, the market value of unsold units, the costs to complete the development and the date on which the consideration is expected to be received by CapitaLand.

Runwal CapitaLand has commissioned a valuation of the equity and preference shares of Runwal CapitaLand by an independent chartered accountant. According to the valuation report, the value of the sale shares is Rs 1,023,900,000 (about S$30 million).

CapitaLand's carrying value of the sale shares, based on the management accounts of Lonsvale as at Sept 30, 2010 was about S$15 million.