AIG Global Real Estate (AIG GRE), the real estate fund of the global financial major, is looking to exit two projects of Bangalore-based RMZ and raise around $450 mn (Rs 2,000 crore).
AIG GRE comprises a group of global companies with AIG that invests in and actively manages $9.4 billion of real estate projects in various countries.
AIG GRE had invested $350 mn in Bangalore, Hyderabad and Kolkata through a special purpose vehicle (SVP) in 2007. Both AIG GRE and RMZ had then agreed to explore commercial spaces in major Indian cities and "evaluate hospitality development" in such cities. However, the plans were delayed due to global pressure on real estate.
"AIG GRE had invited bids for the stake it holds in the project and is expecting around $450 million," said a persond close to the negotiations. "A global real estate fund is in talks with AIG GRE and negotiations are now focused around the valuation."
If the deal goes through, it would mark AIG's exit from all major investments from India.
Meanwhile, RMZ executives said the company has already approached AIG GRE to buy out their stake. "We want to buy out AIG's 50% stake in our projects in Kolkata and Hyderabad," a RMZ executive said. "We invited them to come on the table and discuss about the valuations but they have not responded yet."
RMZ last year bought AIG GRE's stake in Bangalore SPV for an undisclosed amount.
After its exit from the Bangalore project, AIG GRE will be left with 50% stake in both Hyderabad and Kolkata projects.
According to industry experts, AIG GRE could also be getting an independent offer so as to negotiate the valuations with RMZ. "It makes sense for AIG GRE to get an independent offer from a buyer and then sit on the table with RMZ," said a senior researcher with an international real estate consultancy. "This in a way establishes the current market valuation of the stake."
When asked about the RMZ deal, an official who is part of the investment team denied such a development. A detailed email query sent by HT on Friday also did not elicit any response.