Era calls off merger

Era Group, the New Delhi-based infrastructure, real estate, power and construction equipment player, has cancelled plans to combine its realty arm with its entertainment and hospitality business due to the slowdown.

Last month, the group withdrew its application to the Bombay Stock Exchange to merge Era Landmarks with the listed Era E-Zone, said H S Bharana, the group’s chairman and managing director.

Era Group’s other firms are Era Infra Engineering, Era Power and Era Building Systems. Era Group, with projects worth Rs 5,000 crore, was reportedly planning to create three verticals -- construction and infrastructure (including power), real estate, and construction equipment. “We had planned to merge E-Zone with Era Landmarks but given the condition of the realty sector, we decided to go against it,” Bharana said.

Bharana added that Era Landmarks was doing well and it made more sense in the current scenario to keep the two firms separate. Era E-Zone has opened three multiplexes with 12 screens in Ajmer, Meerut and Jaipur in the last three months. Era Landmarks has 15 commercial and residential projects spread across tier-II and III towns, of which only the mall in Meerut is complete.

Bharana said, “Though we have invested only in prime locations in these towns, we are not focusing on real estate.” The group would lay stress on infrastructure in the coming months, Bharana added.

Moreover, no decision has been taken yet on the proposed merger of Era Power with Era Infra Engineering, the group’s flagship company, Bharana said.

The infrastructure firm is into roads and highways, railways and aviation, among others, and contributes two-third to the group’s topline.

Apollo Asia Fund to invest in Indian residential projects

The Singapore-based Apollo Asia Opportunity Master Fund plans to invest $10 million (Rs 40 crore) in developing residential projects in south India. Havenstead Developers, floated by an NRI and an Indian entrepreneur, along with Apollo Asia will invest in joint ventures with project funding institutions to promote the residential development.

Amol Karnad, managing director, Havenstead Developers Pvt Ltd, with which the fund has signed an agreement, said these joint ventures would be special purpose vehicles that are subsidiaries of Havenstead, which has sought Foreign Investment Promotion Board (FIPB) approval for the investment.

“These would be large projects in line with the FDI regulations and focus primarily on the southern markets,” Karnad said, adding that FIPB application is to acquire the status of foreign-owned Indian operating-cum-holding company for making downstream investment in construction.

Karnad, who himself is a founder-promoter of Alacrity Housing, a company that in the 1990s was among the market leaders and a major brand, said he had been taken on board for his experience in developing projects in the South. Karnad would be supporting Apollo Asia set up its business in India.

Alacrity itself is going through a financial crunch, which it is addressing independently. Karnad clarified that there is “no direct connection to Alacrity” and Havenstead. Havenstead has committed to making the investments and is now in the process of identifying the projects, locations and studying the market.

But as of now the progress is slow because of the market conditions. While no transfer of funds have taken place, a firm commitment is made, Karnad said.