APAC XXIII Limited and Kotak Fund Secure Right to Nominate Director on Embassy Office Parks REIT Board

The proposed combination involves APAC Company XXIII Limited (APAC XXIII) and Kotak Performing RE Credit Strategy Fund I (Kotak Fund) collectively exercising their right to nominate a director on the board of Embassy Office Parks REIT (Embassy REIT), following recent amendments to the Securities Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014.

Key Entities Involved:

• APAC XXIII Limited (Acquirer 1): Owned and controlled by funds managed by Bain Capital Credit Member, LLC and its affiliates. Bain Capital Credit specializes in global credit investments across various strategies including leveraged loans, high-yield bonds, and structured equity.
• Kotak Performing RE Credit Strategy Fund I (Acquirer 2): An alternative investment fund managed by Kotak Alternate Asset Managers Limited, registered under SEBI’s Alternative Investment Funds Regulations, 2012.
• Embassy Office Parks REIT (Target): Managed by a private limited company with its registered office in Bengaluru, Karnataka. Embassy REIT is an irrevocable trust under the Indian Trusts Act, 1882, focusing on owning, operating, and investing in rent and income-generating real estate in India.

Purpose and Implications of the Combination:

• Director Nomination Right: The acquirers aim to nominate a director to Embassy REIT’s board, leveraging their rights under SEBI’s amended regulations. This move aligns with their strategic interests in overseeing and influencing the operations and governance of Embassy REIT.
• Strategic Investment: Bain Capital Credit’s involvement reflects its strategy to invest in diverse credit-related assets globally. Meanwhile, Kotak Fund’s participation underscores its focus on alternative investment opportunities within India’s real estate sector.

Regulatory Context:

• The move comes in light of SEBI’s amendments to the Real Estate Investment Trusts (REITs) Regulations, 2014, enhancing governance and operational oversight mechanisms for REITs.

Conclusion:

The proposed combination underscores a strategic initiative by APAC XXIII and Kotak Fund to enhance their influence over Embassy Office Parks REIT through board representation. This development is expected to bolster Embassy REIT’s governance framework and align it with global investment practices.

Detailed order of the Commission will follow.

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