Unitech sells Saket office for Rs 450 cr

Published: May 21, 2009

NEW DELHI: India’s second-largest real estate firm Unitech has sold its office building in Saket, New Delhi, for around Rs 425-450 crore to an
unnamed property investor, following over six months of negotiations with several prospective buyers.

Unitech MD Sanjay Chandra said the deal amount is over Rs 500 crore, but didn’t disclose the buyer’s name. People familiar with the negotiations said the buyer is a Delhi-based industrialist, who plans to lease out spaces in the 2-lakh sq ft building to other companies. They said the deal amount is between Rs 425-450 crore. The building is ready and was earlier supposed to house Unitech’s corporate office, which is currently in Gurgaon.

Unitech had been expecting more than Rs 500 crore for the office building and was earlier in talks with HDFC to sell it. The financial institution has in the past denied holding talks with Unitech on this but had said the Saket property was mortgaged with it as collateral for a loan worth Rs 30 crore given to Unitech. The downturn in the real estate sector and extraordinary level of debt that Unitech had piled on its balance sheet forced the company to put several of its assets, including the Saket office building and the Gurgaon hotel, on the block late last year. The downturn made it difficult for Unitech to sell its properties.

After several months of negotiations with several buyers, the company had sold its hotel in Gurgaon for Rs 231 crore to a car dealer Roop Madan early this year.

Unitech had a total debt of Rs 10,000 crore, as of December quarter and found it difficult to keep pace with its repayment schedule. Loans due to several banks and mutual funds were restructured, after Reserve Bank of India allowed restructuring of commercial real estate loans.

As part of its deleveraging process, Unitech also went in for a qualified institutional placement (QIP) to raise around Rs 1,600 crore last month. The company has now announced that it aims to raise further equity in the company to improve its debt to equity ratio which helps in bringing down the cost of funds for the company.

Unitech will also issue warrants to the promoters who plan to pump in Rs 1,000 crore in Unitech to raise their stake, said a company executive on conditions of anonymity. The holding of Chandra family has dropped from 64% to 51% post-QIP.

Source: Economic Times

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