Mumbai based conglomerate, Delta Corp. Ltd, said it will exit a real estate ventures in Kenya it co-owns with Indian tycoon Mukesh Ambani’s subsidiary after it more than doubled its investment in five years, The Star reported.
Delta said in its latest annual report that it “is gradually and profitably exiting its various real estate projects in Kenya”, and will withdraw fully by the end of financial year 2013/14, which ends March.
It owns a 40 per cent stake in Delta Corp East Africa, which has built and sold several properties in and around Nairobi, while Reliance Industries Ltd – a subsidiary Ambani – holds the rest. It is not clear whether Delta will sell its stake to Ambani’s subsidiary or a different buyer.
“The successful completion of these projects has translated into a handsome return over the investment period,” The Star quotes Delta saying.
“The returns have been good and the added cash flow will aid further growth of our gaming and hospitality business.”
The joint venture has over the past five years developed and sold several properties in the capital Nairobi, including Delta Centre in Upper Hill that was bought by the World Bank at $22.8 million in 2011.
“This is one of the most prestigious deals in that market and which firmly positioned the joint venture as a leading player in the Kenyan real estate market,” the firm said.
Delta Corp is exiting when the joint venture company has invested $32 million “to acquire 10 prime plots of land in Nairobi”, which have potential to deliver 1.2 million square feet of commercial and residential space.
Reports from Indian media said the Delta’s exit from Kenya could earn it $33 million and the firm will use some of the proceeds to retire its internal debt accruals of about $16 million.