Unitech may go for $250-m qualified institutional placement
The Hindu Business Line, April 10, 2009, Page 1
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Funds mop-up
Unitech is already sounding out potential investors and road shows could follow soon
Proceeds of the QIP are likely to be used for servicing debt
--------------------------------------------------------------------------------
Our Bureau, New Delhi
Real estate company Unitech Ltd is said to be holding discussions with various financial institutions to gauge investor interest for a possible $250-million Qualified Institutional Placement (QIP).
The top brass of Unitech including its Managing Director, Mr Sanjay Chandra, have been camping in Mumbai for the last two days in preparation of the proposed issue. However, much would hinge on the feedback from the investor community.
Sources said that Unitech – which is facing a huge financial crunch and has nearly Rs 8,000-crore debt on its balance sheet – has roped in UBS and IDFC SSKI to manage the QIP issue. An e-mail questionnaire sent to Unitech remained unanswered.
When contacted, a Mumbai-based analyst said that the latest move could lead to an earnings per share (EPS) dilution of about 15 per cent if the company was to mop up $250 million. “At the current market capitalisation of nearly $1.5 billion, a $250-million QIP could mean an EPS dilution of close to 15 per cent,” the analyst said adding that QIP size could be larger if the investor sentiments were really strong.
Sources, however, confirmed that Unitech is already sounding out potential investors and that road shows could follow soon, if investor interest was found to be high. The modalities of the QIP issue are not immediately known.
“The market sentiments have improved since last year,” they said. It may be recalled that last year the company had planned to raise $1.5 billion (Rs 6,000 crore) through the QIP route. But it was forced to put those plans on hold due to instability in the domestic stock market and the global liquidity crunch, at that time.
Sources familiar with the process said that the proceeds of the QIP would largely be utilised to service the company’s debt. Unitech shares on the BSE rose 6.86 per cent to close at Rs 42.05 on Thursday. It had hit a high of Rs 338 on May 5, 2008 and a low of Rs 21.80 on November 28, 2008.
The Hindu Business Line, April 10, 2009, Page 1
--------------------------------------------------------------------------------
Funds mop-up
Unitech is already sounding out potential investors and road shows could follow soon
Proceeds of the QIP are likely to be used for servicing debt
--------------------------------------------------------------------------------
Our Bureau, New Delhi
Real estate company Unitech Ltd is said to be holding discussions with various financial institutions to gauge investor interest for a possible $250-million Qualified Institutional Placement (QIP).
The top brass of Unitech including its Managing Director, Mr Sanjay Chandra, have been camping in Mumbai for the last two days in preparation of the proposed issue. However, much would hinge on the feedback from the investor community.
Sources said that Unitech – which is facing a huge financial crunch and has nearly Rs 8,000-crore debt on its balance sheet – has roped in UBS and IDFC SSKI to manage the QIP issue. An e-mail questionnaire sent to Unitech remained unanswered.
When contacted, a Mumbai-based analyst said that the latest move could lead to an earnings per share (EPS) dilution of about 15 per cent if the company was to mop up $250 million. “At the current market capitalisation of nearly $1.5 billion, a $250-million QIP could mean an EPS dilution of close to 15 per cent,” the analyst said adding that QIP size could be larger if the investor sentiments were really strong.
Sources, however, confirmed that Unitech is already sounding out potential investors and that road shows could follow soon, if investor interest was found to be high. The modalities of the QIP issue are not immediately known.
“The market sentiments have improved since last year,” they said. It may be recalled that last year the company had planned to raise $1.5 billion (Rs 6,000 crore) through the QIP route. But it was forced to put those plans on hold due to instability in the domestic stock market and the global liquidity crunch, at that time.
Sources familiar with the process said that the proceeds of the QIP would largely be utilised to service the company’s debt. Unitech shares on the BSE rose 6.86 per cent to close at Rs 42.05 on Thursday. It had hit a high of Rs 338 on May 5, 2008 and a low of Rs 21.80 on November 28, 2008.
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