MUMBAI: Subhash Chandra-promoted E-City Entertainment has diluted 26 per cent stake to Infrastructure Leasing & Financial Services Ltd (IL&FS) for Rs 1 billion.

The funds will be used for real estate development in two new projects which will require a total investment of Rs 2 billion. "IL&FS has acquired 26 per cent stake in E-City for Rs 1 billion. We will be investing Rs 2 billion in two projects, for which we are also raising a debt of Rs 1 billion," E-City Ventures CEO Atul Goel tells Indiantelevision.com.

E-City hived off its multiplex business into a company called Fun Multiplex Pvt Ltd last year, Goel said. The real estate business is being handled by E-City Entertainment and is setting up malls. "We decided to hive off the multiplex and real estate businesses into separate companies. We felt that the investors in real estate would not necessarily want to take exposure to the multiplex business," Goel said.

E-City hived off its multiplex business into a company called Fun Multiplex Pvt Ltd last year, Goel said. The real estate business is being handled by E-City Entertainment and is setting up malls. "We decided to hive off the multiplex and real estate businesses into separate companies. We felt that the investors in real estate would not necessarily want to take exposure to the multiplex business," Goel said.

The company has already invested Rs 2.17 billion in developing five projects. E-City Entertainment has put in Rs 600 million for the Andheri property (130,000 sq ft) in Mumbai, Rs 750 million in Lucknow (400,000 sq ft), Rs 550 million in Ahmedabad (160,000 sq ft) and Rs 270 million in Chandigarh (90,000 sq ft). "Three of our properties are already operational while the one at Lucknow will stand up by July. In Coimbatore we have acquired 350,000 sq ft and it should be operational by the end of next year. We are yet to identify another property but it could preferably be in the southern region," Goel said.