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Unitech to Raise Long Term Funds Through Issue of Securities

19 May, 2009
Cash strapped real estate major, Unitech Ltd., which recently raised $325 million through qualified institutional placement (QIP) issue, is now planning to raise additional long term funds by issuing securities. It also plans to raise funds by issuing warrants to the promoters.
 
In a meeting held today, the company’s board has approved its proposals for raising funds through the issuance of securities as well as by issuing warrants to the promoters on preferential basis. The company has, however, not disclosed the amount of funds that it plans to raise.
 
Last month Unitech had raised $325 million through a QIP to part retire its Rs 8,900 crore debt and strengthen its balance sheet. The promoter holding in the company had fallen to 51% from 64% post the QIP.
 
Media reports suggest that the beleaguered real estate firm also plans to raise around Rs 900 crore by selling off two of it hotels in Gurgaon and a commercial office complex in Saket, New Delhi by the end of the next month. The company is also looking at raising Rs 1600 crore through the sale of its assets by the end of the current fiscal. It plans to sell its plots as well as residential projects.  
 
The real estate sector in India is reeling under the pressures of heavy debts and the lack of liquidity accompanied by low demand. The sector, which is the worst hit by the slowdown, is now taking to various options to survive these tough times. Most of companies in the sector are either raising money through sale of assets or through the QIP route.
 
While DLF promoters recently sold a 9.9% stake to raise Rs 3,860 crore ($780 million), Indiabulls Real Estate is looking at raising funds through a QIP. It opened an up to $600 million issue yesterday and has raised $550 million till now. DLF is also planning to raise Rs 10,000 crore in the next 2-3 months by selling off its land parcels, real estate projects and treasury investments. It also plans to sell some of its hotel projects and businesses such as the wind power business to raise the amount.

 


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Unitech to Raise Long Term Funds Through Issue of Securities

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