India’s top property developer Lodha Group, which was facing difficulty in meeting its debt obligations, has repaid $325 million to redeem a US dollar bond that was due this Friday.
Lodha Developers International Ltd, a UK unit of the Mumbai-based group, clubbed internal accruals from its India and UK business and raised fresh funds to pay off the bonds, the company said in a statement.
Lodha Developers International is a unit of group flagship Macrotech Developers Ltd, which was earlier known as Lodha Developers Pvt. Ltd. It financed the repayment partly by raising $200 million (Rs 1,470 crore) via senior secured notes due 2023 last week. On Monday, the developer increased the size of the new bond by $25 million (Rs 180 crore).
The development comes at a time when the capital markets were keeping a close watch on the possible implications on the creditworthiness of domestic real estate companies had Lodha defaulted on its debt.
Abhishek Lodha, managing director and CEO at Macrotech Developers, said the company had always been confident of meeting its $325 million bond repayment obligations.
“In the current market scenario, our performance is a testament to how Indian companies can rise against the tide and continue their growth journey,” he said.
Media reports had suggested that given the market environment and delay in raising fresh capital, Lodha Group would have sweetened the deal for investors. It is likely the company would have agreed for better terms for investors.
In March, the group’s UK subsidiary had also raised 86 million pounds (Rs 800 crore). In addition, the proceeds and additional cash flows from the firm’s UK and India businesses totalling around Rs 900 crore supported the bond repayment.
While the company has averted a repayment crisis for now, analysts aren’t fully convinced about its financial health. Ratings firm Moody's has said that Macrotech’s new bond issue would address immediate refinancing risk but the company’s credit quality would remain weak.
Lodha Group clocked net new sales of over Rs 7,000 crore in 2018-19 with collections of over Rs 9,000 crore.