Canada Pension Plan Investment Board (CPP Investments) will invest up to ₹3,000 crore (C$441 million) in Prestige Hospitality Ventures (PHVL), the hospitality arm of Bengaluru-based Prestige Estates Projects, acquiring approximately 27 percent of the company, according to a regulatory filing disclosed on Monday.
The investment — made through CPP Investment Board Private Holdings (4) Inc. — marks CPP Investments' first direct investment in India's hospitality sector, building on its Asia-Pacific hospitality exposure, which includes recent investments in Japan and Korea.
Three-tranche structure
The investment comes in three tranches combining primary capital infusion into PHVL and a secondary share purchase from Prestige Estates. In the first tranche, Prestige Estates will receive ₹950 crore from the sale of PHVL equity shares to CPP Investments, while PHVL separately receives ₹550 crore through Series A compulsorily convertible preference shares (CCPS).
In the second and third tranches, PHVL will receive ₹750 crore each through Series B and Series C CCPS respectively. In total, Prestige Estates will receive ₹950 crore through the secondary transaction, while PHVL gets ₹2,050 crore of fresh capital.
Post-completion, CPP Investments will get governance and affirmative voting rights, along with exit rights through a PHVL initial public offering or a put option against Prestige Estates and PHVL after five years from completion. Separately, Prestige Estates has issued a corporate guarantee for a loan facility of up to ₹400 crore being availed by PHVL from Axis Bank.
What they said
Prestige Group chairman and managing director Irfan Razack said: "CPP Investments' long-term investment approach complements our development capabilities and market understanding and together we look forward to creating a hospitality platform of scale."
Hari Krishna, head of real estate India and Mumbai office head at CPP Investments, said: "This investment offers an opportunity to participate in the sector's long-term growth through a well-positioned platform, while seeking to generate attractive risk-adjusted returns for CPP contributors and beneficiaries."
The transaction builds on an announcement made on August 10 through an exchange filing, with a binding framework agreement executed in August; the latest filing discloses the final tranche structure. Separately, Prestige Estates recently withdrew PHVL's IPO papers, citing market conditions. Shares of Prestige Estates were trading about 2.09 percent higher at ₹1,447.1 apiece at 9:25 am on Tuesday, though the stock is down about 11.4 percent over the past month.
Sources: CPP Investments Makes ₹3,000 Crore Bet on Prestige Hospitality Ventures for 27% Stake | Prestige Estates shares gain as CPP Investments to acquire 27% stake in hospitality arm for ₹3,000 crore
The investment — made through CPP Investment Board Private Holdings (4) Inc. — marks CPP Investments' first direct investment in India's hospitality sector, building on its Asia-Pacific hospitality exposure, which includes recent investments in Japan and Korea.
Three-tranche structure
The investment comes in three tranches combining primary capital infusion into PHVL and a secondary share purchase from Prestige Estates. In the first tranche, Prestige Estates will receive ₹950 crore from the sale of PHVL equity shares to CPP Investments, while PHVL separately receives ₹550 crore through Series A compulsorily convertible preference shares (CCPS).
In the second and third tranches, PHVL will receive ₹750 crore each through Series B and Series C CCPS respectively. In total, Prestige Estates will receive ₹950 crore through the secondary transaction, while PHVL gets ₹2,050 crore of fresh capital.
Post-completion, CPP Investments will get governance and affirmative voting rights, along with exit rights through a PHVL initial public offering or a put option against Prestige Estates and PHVL after five years from completion. Separately, Prestige Estates has issued a corporate guarantee for a loan facility of up to ₹400 crore being availed by PHVL from Axis Bank.
What they said
Prestige Group chairman and managing director Irfan Razack said: "CPP Investments' long-term investment approach complements our development capabilities and market understanding and together we look forward to creating a hospitality platform of scale."
Hari Krishna, head of real estate India and Mumbai office head at CPP Investments, said: "This investment offers an opportunity to participate in the sector's long-term growth through a well-positioned platform, while seeking to generate attractive risk-adjusted returns for CPP contributors and beneficiaries."
The transaction builds on an announcement made on August 10 through an exchange filing, with a binding framework agreement executed in August; the latest filing discloses the final tranche structure. Separately, Prestige Estates recently withdrew PHVL's IPO papers, citing market conditions. Shares of Prestige Estates were trading about 2.09 percent higher at ₹1,447.1 apiece at 9:25 am on Tuesday, though the stock is down about 11.4 percent over the past month.
Sources: CPP Investments Makes ₹3,000 Crore Bet on Prestige Hospitality Ventures for 27% Stake | Prestige Estates shares gain as CPP Investments to acquire 27% stake in hospitality arm for ₹3,000 crore
