Unitech postpones Rs 500 cr mutual fund debt repayment
The Economic Times, April 24, 2009, Page 19
Notwithstanding its successful Rs 1,620-crore Qualified Institutional Placement (QIP) issue, troubled real estate company Unitech has postponed the repayment of a large part of the Rs 500-crore debt it had to pay back to mutual funds by April 19. According to a person familiar with the development, Unitech has repaid a fifth of this amount and rolled over 80% by another 12 months.
When contacted, the company refused to comment. However, a top executive, on condition of anonymity, told ET NOW: “We have restructured most of the debt and paid off some in such a way that all mutual funds have been paid proportionately, but none of their debt has been completely paid off.”
The company has restructured the debt for one year at an interest rate of 13%, much lower than the earlier 18%, said the person with knowledge of the situation. Unitech owed over Rs 500 crore to mutual funds of Reliance, HSBC, Sundaram BNP Paribas, SBI, UTI, Kotak and ING Vysa.
The debt restructuring has taken place at the same time as the company closed its QIP last week. On Wednesday, it formally informed the stock exchanges that it had placed over 420 million shares to 44 QIBs (Qualified Institutions Buyers) at Rs 38.50 a share. A JP Morgan report last week said the issue will result in a 26% dilution of the pre-issue share capital. Company executives told ET NOW that Unitech plans to use the proceeds from the QIP for reducing its debt and launching new projects.
Last week’s successful closure of Unitech’s QIP issue had raised expectations that the real estate company will be able to repay the Rs 500-crore debt on time. But, the company has decided to follow a strategy of postponing the bulk of the repayment by another 12 months.
The Economic Times, April 24, 2009, Page 19
Notwithstanding its successful Rs 1,620-crore Qualified Institutional Placement (QIP) issue, troubled real estate company Unitech has postponed the repayment of a large part of the Rs 500-crore debt it had to pay back to mutual funds by April 19. According to a person familiar with the development, Unitech has repaid a fifth of this amount and rolled over 80% by another 12 months.
When contacted, the company refused to comment. However, a top executive, on condition of anonymity, told ET NOW: “We have restructured most of the debt and paid off some in such a way that all mutual funds have been paid proportionately, but none of their debt has been completely paid off.”
The company has restructured the debt for one year at an interest rate of 13%, much lower than the earlier 18%, said the person with knowledge of the situation. Unitech owed over Rs 500 crore to mutual funds of Reliance, HSBC, Sundaram BNP Paribas, SBI, UTI, Kotak and ING Vysa.
The debt restructuring has taken place at the same time as the company closed its QIP last week. On Wednesday, it formally informed the stock exchanges that it had placed over 420 million shares to 44 QIBs (Qualified Institutions Buyers) at Rs 38.50 a share. A JP Morgan report last week said the issue will result in a 26% dilution of the pre-issue share capital. Company executives told ET NOW that Unitech plans to use the proceeds from the QIP for reducing its debt and launching new projects.
Last week’s successful closure of Unitech’s QIP issue had raised expectations that the real estate company will be able to repay the Rs 500-crore debt on time. But, the company has decided to follow a strategy of postponing the bulk of the repayment by another 12 months.
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