The board of directors of Unitech Ltd., the beleaguered realty major, has approved the company’s plans of raising additional long-term funds up to Rs 5,000 crore in an extra ordinary general meeting today. The funds would be raised through the issue of securities. The board has also approved its plan to increase the authorised share capital from Rs 500 crore to Rs 1,000 crore.
According to a report in The Hindu, the company is in an urgent need of capital as it has already rescheduled Rs 1,000 crore loans it has to pay Rs 2,500 crore by March this year. The company’s total debt is around Rs 8,350 crore. Unitech has also been talking to investors to sell some of its assets to raise money to repay debt.
The second largest listed real estate company in the country has also rolled over almost Rs 500 crore out of Rs 900 crore that it borrowed through the fixed maturity plans (FMPs). Unitech has repaid nearly Rs 400 crore and is rolling over the remainder for three months at 14% interest.
DLF Assets (DAL), a subsidiary of DLF is also planning to raise $450 million from a group of private equity investors. The company is also looking to raise funds through debt from domestic banks and external commercial borrowing (ECB). DLF has already sold 20 million sq ft of commercial property to DAL for which it will pay Rs 600 crore to DLF starting financial year 2009.