Friday, 8 February, 2008

EMAAR MGF - All over, money in 15 days!

Money to be refunded to investors in 10 to 15 days

Emaar MGF Land became the second victim in the last two days of depressed secondary market conditions as it today withdraw its initial pubic offer (IPO) following poor response to the issue. The company will now look at private placement and private equity deals at the special purpose vehicle (SPV) level.

Wockhardt Hospitals, late on Thursday, 7 February 2008 withdrew its initial public offer (IPO) due to poor investor response.

Emaar MGF Land would refund the money to investors in 10 to 15 days. The Emaar MGF Land IPO was subscribed 0.83 times as at 16:00 IST on its fourth day of issue on 7 February 2008. However, most investors might have pulled-out their bids today, 8 February 2008, as indicated by the fall in subscription figures. As a result the issue was subscribed just 0.43 times as of 15:00 IST today, 8 February 2008.

The company had cut the price band of its initial public offer for the second time on Wednesday, 6 February 2008 and also extended the date of closing of the issue to Monday, 11 February 2008, due to poor response to the issue. The price band was revised from Rs.540 to Rs 630 per share to Rs 530 to Rs.630 per share.

The price band for the issue was initially pegged at Rs 610 to 690 per equity share. The IPO had opened for subscription on 4 February 2008.

Real estate major Emaar MGF Land is a joint venture between Emaar Properties PJSC of Dubai and MGF of India. Emaar group holds 41.9% stake in the JV while MGF holds 53.3% stake.

The proceeds of the IPO were to be used for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects; development and construction costs for project Palm Drive in Gurgaon; and repayment of loans; and general corporate purposes (GCP).