Billionaires: HSBC nearly doubles loan for Mukesh Ambani’s UK real estate bet

In our fortnightly round-up of the world’s super wealthy, Egypt’s Naguib Sawiris eyes stake in $7 billion Pakistan mine and Jeff Bezos buys Florida mansion for $79 million

Mukesh Ambani’s conglomerate is carrying out a major refurbishment of Stoke Park in the UK, a marquee asset in its shift away from the energy sector. Bloomberg
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Mukesh Ambani

HSBC has nearly doubled the size of a loan arrangement to part of Indian billionaire Mukesh Ambani’s business empire, bolstering its bet on Asia’s richest person.

The London-based bank originally provided a £60 million ($73 million) loan facility to a subsidiary of Reliance Industries shortly after it acquired the Stoke Park estate in south-east England for £57 million in 2021, according to UK registry filings.

It has since extended the arrangement three times, with the latest disclosed increase in December taking it to £115 million, the filings show.

HSBC has been involved for more than a decade in financing arrangements for Stoke Park, a roughly 300-acre Buckinghamshire leisure property that includes a championship golf course and has provided a setting for two James Bond films.

Mr Ambani’s conglomerate is carrying out a major refurbishment of Stoke Park, a marquee asset in its shift away from the energy sector that has underpinned the billionaire’s fortune.

Reliance’s renovation plans include replacing the roof of the property’s Georgian-era mansion that is now a luxury hotel, erecting seven-star villas and removing surface-level parking.

Mr Ambani, 66, is the world’s 11th-richest person through his major stake in Reliance, India’s most valuable company, according to the Bloomberg Billionaires Index.

HSBC and Mr Ambani’s companies have a history of working together, spanning blockchain-enabled transactions and other ways of speeding up business in India.

In June, they executed a form of derivatives contract the day after India allowed banks to offer enhanced currency hedging opportunities to customers.

HSBC is betting on India to expand its business worldwide and has joined rival companies in boosting wealth management operations in the country.

A steady stream of senior HSBC executives have visited India during the past few years, including chief executive Noel Quinn, who met Mr Ambani and other members of Asia’s richest in 2022.

Reliance, a retail-to-refining conglomerate, bought Stoke Park as part of a broader pivot towards consumer offerings.

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It acquired UK-based toy-store chain Hamleys in 2019 and expanded the British retail icon in India.

It also bought an indirect stake in the five-star Mandarin Oriental New York hotel.

This year, Reliance reached a deal with hospitality firm Oberoi Hotels & Resorts to help manage assets including Stoke Park, which appeared in the 1964 Goldfinger and 1997 Tomorrow Never Dies instalments of the James Bond franchise.

More recently, the estate provided a setting for The Crown, Netflix’s drama about the British royal family.

Naguib Sawiris

Egyptian billionaire Naguib Sawiris, who has forged a fortune in telecom and gold, is eyeing an investment in Barrick Gold’s $7 billion Reko Diq copper-gold project as he looks to expand his business in Pakistan.

Reko Diq, in the Balochistan region that borders Afghanistan and Iran, is one of the world’s largest undeveloped copper and gold deposits, capable of producing 200,000 tonnes of copper and 250,000 ounces of gold a year for more than half a century.

The project is jointly owned by Barrick and Pakistan.

Asked whether he was interested in investing, Mr Sawiris, a major investor in gold miners including Endeavour Mining through his La Mancha Resources, said “yes”.

“I have an advantage compared to other investors. I know the country, I have friends here,” Mr Sawiris said in an interview in Islamabad.

“We want to be on the Pakistani side, because I have been here for 25 years.”

He did not elaborate on the potential scale of the investment, but added there were few other options, in part due to the lack of geological data: “We tried here to look but unfortunately there is only this one big project.”

If there is concrete in my way, I’ll drill through it and I’ll go. I have never let anybody in my life hold me back from what I wanted to achieve
Naguib Sawiris, Egyptian billionaire

Last month, Barrick chief executive Mark Bristow said he was seeing newfound “interest” in Reko Diq from multinational mining companies that have to date been hesitant to venture into tricky regions of the world.

The mine has also attracted interest from Saudi Arabia, whose presence could serve to stabilise the project.

Pakistan’s state-owned energy exploration companies, which have a stake in the project, said last month they were looking into “potential engagement” with sovereign foreign investors, without giving details.

Mr Sawiris’ Ora Developers is separately working on a luxury housing project, Eighteen, and he earlier set up one of Pakistan’s first mobile phone companies, Mobilink, now owned by Veo.

Pakistan’s lengthy, difficult official procedures, an unstable currency and capital restrictions are hurdles for investment, but Mr Sawiris said he remained optimistic.

“If there is concrete in my way, I’ll drill through it and I’ll go,” he said. “I have never let anybody in my life hold me back from what I wanted to achieve.”

Jeff Bezos

Jeff Bezos is adding a mansion in South Florida’s “Billionaire Bunker” to his real estate empire, months after buying the house next door.

The Amazon founder, the world’s third-richest person, agreed to pay $79 million for a seven-bedroom mansion in Indian Creek, a man-made barrier island in the Miami area, according to sources.

That’s a 7.1 per cent discount from its May listing price of $85 million.

Mr Bezos bought the neighbouring home in June for $68 million. With the latest purchase, he’ll gain a roughly 1.8-acre property that was built in 2000. The house last sold for $28 million in 2014.

Mr Bezos, 59, could still make other purchases in the area, according to a source.

Indian Creek, in Biscayne Bay and about 13 kilometres from South Beach, is known as “Billionaire Bunker” for being home to investor Carl Icahn, football star Tom Brady and singer Julio Iglesias, as well as Jared Kushner and Ivanka Trump.

Besides the Indian Creek properties, Mr Bezos has homes in Washington, a nine-acre Beverly Hills mansion he bought for $165 million in 2020 and an estate in Maui.

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His ultra-luxury spending has picked up since he stepped down as Amazon’s chief executive in 2021 and after he separated from MacKenzie Scott.

He owns one of the world’s most expensive superyachts, the Koru, which was launched this year and cost an estimated $500 million to build.

His newest Indian Creek home covers roughly 19,000 square feet, according to the listing, and includes a pool, a theatre, a library and a wine cellar.

Mr Bezos has a nearly $152 billion fortune, according to the Bloomberg Billionaires Index, making him one of the richest homeowners in Florida.

Bill Ackman

When billionaire investor Bill Ackman first proposed his riff on special purpose acquisition companies (Spacs) – he wanted to slap an R in the middle of the acronym – few cared on Wall Street.

This was mid-2021 and the Spac market, where investors hand cash to a deal-maker hunting for a company to acquire, was just months removed from peak mania.

So bankers weren’t too interested in contemplating a new flavour of Spac that would add a layer of complexity.

Now, with the dormant Spac market in desperate need of a jolt, the Ackman Sparc is getting another look.

True, this is mostly because Mr Ackman has begun talking it up again after getting regulatory approval in September. But, unlike the last time, it’s generating interest in the Spac world.

Bankers, lawyers and sponsors are quick to point out features of the Sparc that could help drum up interest in a market that went bust.

Prominent among them: Sparcs don’t pool investor cash upfront like Spacs do. This means holders can choose to opt in if they like a proposed merger instead of having their cash sit around in mostly low-yielding investments before deciding to yank their money out of a bad Spac deal.

A Sparc – short for special-purpose acquisition rights company – gives holders the right to invest in a deal while its blank-cheque counterpart sells units to investors that are then freely traded on an exchange.

Mr Ackman is giving himself 10 years instead of the shorter deadlines Spacs race against, and rights won’t trade until a merger is unveiled.

His investment vehicle Pershing Square Sparc Holdings will first find a target, then determine the cash to raise.

So far, the Sparc hasn’t led to any fresh deals. Mr Ackman had dangled the idea that he could use the structure to team up with Elon Musk in taking X, the company formerly known as Twitter, public. Mr Musk has shown no public interest in such a deal.

A Sparc also comes with its own set of risks. Because the rights are expected to trade over the counter, instead of on a national securities exchange like NYSE, trading after a deal is announced could be volatile.

Still, Mr Ackman says the new structure is better aligned with public investor interest and will be less dilutive for its target than a traditional Spac.

It doesn’t have the deeply discounted shares that typically benefit sponsors in a Spac deal, even if shares tank because the Sparc incentives require shares to rise at least 20 per cent above the price paid by public investors.

It also doesn’t have warrants issued to public investors or deal sweeteners blank cheques used to entice investors in their IPO that can increase dilution for successful deals.

A standout for potential targets is affiliates of the Sparc’s sponsor agreeing to commit as much as $3.5 billion as an anchor investor in an eventual merger.

Updated: October 23, 2023, 5:00 AM