According to sources, a concrete move in this direction would be accomplished towards the end of this calendar year. Both entertainment and retailing are new areas for the company, as GESCO has largely been into project management and the Mahindras into realty.
GESCO Corporation and Mahindra Realty & Infrastructure Developers Ltd (MRIDL) last year demerged the realty and infrastructure divisions of MRIDL and merged it into GESCO. The merger is aimed at helping GESCO reap the benefits of the association forged last year and bring about cost and operational efficiencies, in addition to enhancing shareholder value. Indications are that a name change is also in the offing, with the inclusion of the Mahindra name to the entity.
The merged entity already has 2.5 million square feet of area as existing business, and hopes to further expand its base to new cities and townships.
It may be recalled that in October 2000, Renaissance Estates had launched a hostile takeover attempt by making an open offer to acquire 45 per cent of the share capital in Mumbai-based GESCO Corporation.
While Renaissance owned, developed and operated commercial complexes, properties and business centres, GESCO too, was engaged in managing, developing and operating commercial properties. GESCO was originally the real estate division of Great Eastern Shipping and was spun off into an independent company in April 1999 with the
Sheths holding 12-13 per cent in GESCO.
To checkmate the Dalmias and retain control over GESCO, the Sheths deemed fit to rope in the Mahindras for its gameplan. HDFC’s managing director Deepak Parekh played the matchmaker and also offered a line of credit of Rs 35 crore to Mahindras to finance the transaction.
The Sheth-Mahindra combine then went ahead and purchased the entire 6.34 per cent stake in GESCO of Washington-based International Finance Corporation.
The matter took a sudden about-turn in January 2001, when both -- the Sheths-Mahindras combine and the Dalmia group -- reached an amicable settlement, with the former buying out Dalmias’ 10.5 per cent stake at Rs 54 per share for a total consideration of Rs 16 crore.