New Delhi, Nov. 6 -- Indian developer DLF Ltd and private equity firm Everstone are forming a joint venture to take a stake in Ireo Pvt Ltd and other group companies that have been battling allegations of fraud and money laundering since 2018.
Mumbai-listed DLF said in a statement Friday it plans to commit Rs 3,750 crore (around $398 million) for a majority stake in the proposed joint venture with Everstone. The JV will acquire a stake of at least 20% in Gurugram-based Ireo Pvt Ltd and other Indian group companies, along with certain governance rights.
DLF didn't disclose the exact stake it would hold in the JV or the amount that Everstone would commit.
The announcement comes more than eight years after two hedge funds accused Ireo, a real estate investment and development firm, of a $1.5-billion fraud. The hedge funds claimed that Ireo, which had tied up with The Trump Organization in 2016 to construct Trump Towers in Gurugram, siphoned off investors' money.
Ireo is also under investigation by the Serious Fraud Investigation Office and the Enforcement Directorate, which is probing allegations of defrauding home buyers by not delivering flats or plots after taking money from them and of siphoning off funds to related entities. Several court cases have arisen out of this probe.
Transaction details
DLF said the JV's aggregate economic interest in the Ireo entities, including contractual interests, is expected to be around 40%, while Mauritius-based Ireo funds will retain the balance.
The company, which is also based in Gurugram, said it has signed a binding and exclusive term sheet with Everstone and that a separate term sheet was also executed with the Ireo funds for the proposed investment.
The transaction will cover Ireo's Indian businesses, which have investments from global investors through foreign funds. Following completion, the Ireo India companies will be run by an independent management team under an agreed business plan and governance framework, guided by DLF and Everstone. The partners aim to revive business momentum and unlock growth potential across the assets, DLF said.
The proposed transaction is subject to due diligence, corporate, regulatory and third-party approvals, and execution of definitive agreements. Closing is expected during 2027.
"Bringing together strong industry experience and global investment capabilities, we look forward to unlocking the growth potential of the Ireo India Companies," said Ashok Kumar Tyagi, managing director of DLF.
Singapore-headquartered Everstone Group manages assets worth more than Rs 1 trillion. It has investments across real estate, private equity, infrastructure, credit and venture capital.
Published by HT Digital Content Services with permission from VC Circle.