Citi and AIG call off $375m deal

The two firms have cancelled a planned deal with Mumbai-based real estate developer Akruti City.

Citi Venture Capital and AIG have called off a planned Rs1,500 crore ($375 million, €239 million) deal with Mumbai-based real estate developer Akruti City.

The deal, which had been proposed in January, would have seen the two firms pick up a 16 percent equity stake in the company. The firms had proposed acquiring the stake through a preferential allotment of 10.7 million shares.

Adverse market conditions and a delay in getting government approval were cited as the reason for the deal being cancelled. Akruti City managing director Vimal Shah told India’s Economic Times that there has been an long delay in getting government approval from the Department of Industrial Promotion and Policy. He also cited the adverse market conditions that have cropped up in India in the last month. Since hitting a peak on the 14th of January, the Bombay Stock Exchange Realty Index has falled 46 percent.

Sources within the companies also told the paper that the deal had been scratched because the foreign firms and the development company couldn’t agree on valuations.

Having established itself as a quality real estate solutions provider, the company took a step to address its commitment to the city and its citizens. It embarked on its first Slum rehabilitation venture in 1995. Today the company has diversified into commercial projects, infrastructure projects and retail. Akruti was also the first private company to complete a registered IT Park.