Real estate firm Unitech will sell non-core land parcels to reduce debt by 15-20 per cent and improve cash-flows for faster execution of ongoing projects, company’s chairman Ramesh Chandra has said.
Unitech currently has over 100 ongoing projects, totalling an area of 38.41 million sq ft. Its net debt stood at Rs 5,900 crore at the end of the first quarter of this fiscal.
“We do have land that is non-core to the business that will be sold to improve liquidity and reduce debt exposure related risks,” Chandra told shareholders in the company’s annual report for last fiscal.
He also said that the cash flows of the company were affected during last financial year due to adverse market conditions and consequent slowdown in sales.
Stating that Unitech has taken a conscious strategic decision to reduce debt exposure, he said the company has in the recent past undertaken sale of some land parcels for which it has no development plans in the foreseeable future to bridge the cash flow gap.
Apart from land sales, Chandra said it is also monetising some of the commercial assets.
“All these transactions, once concluded, could reduce the company’s consolidated debt by about 15 to 20 per cent,” he added.
In June, Unitech had sold its 40 per cent stake each in four IT SEZ projects for over Rs 1,300 crore to Canada’s Brookfield Asset Management.
Unitech chairman also emphasised on increasing the pace of delivery of projects.
“Since the pace of new projects sold in the last few years was significantly faster than the speed of delivery, the equilibrium in the system was disturbed. Restoring this equilibrium by increasing the pace of delivery is a key priority for the company,” Chandra said.
During 2013-14, Unitech posted a net profit of Rs 69.7 crore, while income from operations stood at Rs 2,933.3 crore.