12 May 2008 06:00
Trikona Trinity Capital PLC
("Trikona TC" or "the Company")
Trikona TC completes £74m deal with SachsenFonds GmbH resulting in a 115% gain
Trikona Trinity Capital PLC (LSE: TRC), a fund created for investing in Indian real estate and infrastructure, announces it has entered into a binding agreement to divest a part of its portfolio and co-invest in new projects with SachsenFonds Holdings GmbH ("SF"), a subsidiary of Sachsen LB, a leading German public sector bank, with a transaction value of £74.15 million.
The transaction, which was first outlined in a Memorandum of Understanding (MoU) on 1 April, 2008, follows the previous divestment of part of Trikona TC's asset portfolio to SF in December for an aggregate sale price of £32.11 million for a cash-on-cash return of 108% ("SF-1"). The current transaction ("SF-2") strengthens the partnership with SF and enables Trikona TC to further divest a part of its portfolio for an aggregate sale price of €68.5 million (£54.10 million*), realising a gain of 115%.
The Transaction-SF-2
SF-2 represents a transaction combining a portfolio sale of existing Trikona TC assets with a co-investment. The portfolio sale to SF for €68.5 million (£55.19 million*) enables SF to acquire incremental shares in Trikona TC's Mauritian SPVs: The table below outlines the current capital structure.
| Mauritian Entity | Underlying Development Asset | Trikona TC Ownership in Underlying Development Asset | Percentage of Mauritian entity acquired in SF-1 | Total Percentage of Mauritian Entity owned by SF post SF-2 | Total Ownership remaining in the Mauritian Entity by Trikona TC |
| Trinity Capital (One) | Development Project 1 | 100% | 8% | 33% | 67% |
| Trinity Capital (Six) | Development Project 5 | 49% | 41% | 100% | 0% |
| Trinity Capital (Ten) | Development Project 3 | 28.99% | 40% | 100% | 0% |
| Trinity Capital (Fourteen) | Development Project 10 | 100% | 0% | 15% | 85% |
Co-investment has taken place in the following project:
Development Project 13, MIG Bandra: An INR 1619.5 million (£20.04 million**) investment by Trikona TC and SF to acquire 49% of a redevelopment project located within the MIG Bandra area in partnership with Rustomjee Developers. As part of its ongoing urban rejuvenation programme, Trikona TC will redevelop a four acre site to provide high quality accommodation aimed at India's rapidly growing middle class. SF and Trikona TC shall contribute to the investment amount at a ratio of 55:45.
It is expected that final closing and simultaneous funding of the transaction will take place on or about 17 June 2008. Both the SF and Trikona TC boards have approved the signing of the Share Purchase and Shareholder Agreement.
Aashish Kalra, Managing Director of Trikona Trinity's fund manager, Trikona Capital, said: "Only firms capable of executing to plan will make money in India. This transaction supports the company's business plan and stated net asset value, and confirms our ability to deliver results. Buoyed by long-standing partnerships and a world-class team, we are realizing significant value on our investments despite more difficult market conditions. We have a solid, scalable investment and development platform and we remain confident this transaction reinforces our leading position at the forefront of the Indian real estate and infrastructure markets."
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Enquiries:
Trikona Trinity Capital PLC managed by Trikona Capital Limited
Aashish Kalra, Managing Director +91 11 4659 6000
Ashesh C. Shah, Global Head of Corporate Development +44 207 870 3454
Bell Pottinger Corporate & Financial +44 207 861 3232
Nick Lambert
Amy Rajendran
Gutenberg Communications
Michael Sherrill (New York) +1 212 239 8741
Pranav Kumar (New Delhi) +91 981 007 7898
Numis Securities +44 207 260 1000
Jag Mundi, Head of Corporate Finance
Charles Farquhar
Fairfax I.S. PLC +44 207 598 5368
Paul Richards, Head of Corporate Finance
Notes:
* Exchange Rate is 0.79 GBP = 1 Euro
** Exchange Rate of 80.79 INR to 1 GBP
About Trikona Trinity Capital PLC:
Trikona Trinity Capital PLC (AIM: TRC) was listed on the London Stock Exchange as Trinity Capital in 2006, raising £250m of equity. The fund invests in real estate and infrastructure related entities across India, with a target size of between £5m and £30m per transaction. Becoming fully invested six months ahead of schedule, its investment strategy is unique - Trikona TC selects developers with a proven track record in the asset class or in the local market, with the specific notion of contributing to India's growth. The Company also adopts a socially aware attitude to development, investing in projects which will actively improve India's underdeveloped social and physical infrastructure.
In November 2007 Trikona TC became the first London listed fund of its kind to realise significant returns on its investments, with the divestment of part of its share holdings creating a gain of 108% over the holding period. The Company is managed by Trikona Capital, a leading fund manager focused on investing in Indian real estate and infrastructure.