Phoenix Mills to acquire over 60% stake in United Malls

Phoenix Mills Ltd has informed that the Board of Directors of the Company at its meeting held on October 24, 2007, had decided to invest in Big Apple Real Estate Pvt Ltd, the owners of the United Malls brand, with an intention to acquire a majority equity stake of over 60% in the said Company.

In this regard the Company has issued the following press release:

Phoenix Mills Ltd (Phoenix) has announced its intention to acquire a majority equity stake of over 60% in Big Apple Real Estate Pvt Lid, (Big Apple) the owners of the United Malls brand. The stake is being acquired through the swap of Phoenix's stake in its Agra project (Market City in Agra) into Big Apple and through an infusion of around Rs 800 million as fresh capital.

This acquisition is in line with the Phoenix's strategy to become the largest developer of mixed-use retail led centers in India. Creating valuable partnerships with developers such as Big Apple enables Phoenix to further extend its presence across the nation and fortify its position as the leading retail centric mixed-use format player in the country.

Big Apple has plans to build retail malls across north India, particularly in the state of Uttar Pradesh (UP) covering cities / towns including Lucknow, Agra, Bareilly, Varanasi amongst others. The funds infused by Phoenix are likely to be deployed across Big Apple's projects in Meerut, building the second large mall in Lucknow, and to move forward with the plans for Gorakhpur, Allahabad, Kanpur and Dehradun.

Big Apple has commenced construction of its Lucknow project and is in final stages of commencing construction of the Agra project. Funding for these projects has been secured by partnering with global as well as Indian private equity players including Kshitij Real Estate Fund, Yatra Capital and Edelweiss Real Estate Fund. While Bareilly and Varanasi projects are at a MoU stage the other ventures are under planning and land acquisition phase.

Big Apple's Lucknow project alms to be the first of its kind in the state, offering a "one stop" destination for shopping, entertainment and dining. It will comprise Departmental / Home Stores, a Multiplex, a Food Court, a Family Entertainment Center, a Luxury Hotel, Restaurants, a Hypermarket, and small format retail stores. The project is being overseen by P.G. Patki & Associates, and is in an advanced stage of construction.

The investment in and partnership with Big Apple is aligned to Phoenix's plans to establish long-term relationships with leading pan India and regional developers with the objective of achieving a formidable cross-country footprint as the leading retail led mixed format player over the next three years.

The transaction has been approved by Phoenix's Board and is subject to the necessary statutory, shareholder and regulatory approvals and due diligence.

Commenting on the development, Mr. Mahesh lyer - CFO of the Company said, "The investment into Big Apple is in line with our objective of stretching our retail canvas across the length and breadth of the country. Uttar Pradesh has a huge potential, and given the operating dynamics in that state, we believe that a relationship with a forward thinking partner in Big Apple will help us realize our goals in the most effective manner. We expect the mall in Lucknow to open in shortly, following which we expect to operationalize the Agra Market City a few months down the line."