Unitech to raise Rs 1,250cr via QIP
The Economic Times, April 10, 2009, Page 5
Proceeds May Be Used To Partially Repay Debt Outstanding To MFs
Abhishek Gupta & Gaurie Mishra NEW DELHI
CASH-STRAPPED realty major Unitech is looking at raising around Rs 1,250 crore through a qualified institutional placement (QIP), according to domestic institutional investors.
The QIP proceeds are likely to be used to partially repay the Rs 500-crore debt outstandings to mutual funds which is due on April 19.
According to some institutional investors, Unitech is hoping to close the issue next week. It has already made the presentations to investors such as SBI, LIC and HDFC. If it goes through at Unitech’s present valuation – it’s current marketcap is Rs 6,824 crore –the QIP could result in a 10-15% stake dilution in the company. Unitech shares rose by 7% during to close at Rs 42.10 on Thursday.
When contacted by ET, the Unitech spokesperson declined to comment on the company's fund raising plans
According to an executive of a major fund house, Unitech executive have told mutual funds that they will use the QIP proceeds to substantially repay the Rs 500-crore debt to MFs that is due later this month.
Unitech has simultaneously also been in talks with mutual funds to roll over the Rs 500-crore debt that was due for repayment on April 19. According to a source close to the development, several mutual funds have agreed to roll-over Unitech’s debt if the realty major does not go through the QIP.
Officials in the banking circuit told ET that MFs and Unitech had mutually agreed to rollover debt for 12-18 months for an interest rate of around 16%. The final agreements will only be signed close to the date of maturity.
People with knowledge of the development said that the QIP issue will happen at around Rs 40 per share. This is Unitech’s second attempt at raising equity through the QIP route. The company tried to raise over $1billion in January 2008 at over Rs 500 a share, but abandoned the plan.
The company has been trying to raise cash by selling its assets.
Till now, it has been successful in selling a single hotel property in Gurgaon for around Rs 230 crore. The company is also looking to raise atleast Rs 500 crore by selling its office property in Saket. It is also trying to sell its hotel properties across India, as well as service apartments and school plots in the NCR.
According to a recent analyst report by Motilal Oswal, Unitech would need Rs 2000-2500 crore to recapitalise its balance sheet.
If the company manages to raise the requisite cash, the risk outlook towards it would decline significantly, the report added.
The Economic Times, April 10, 2009, Page 5
Proceeds May Be Used To Partially Repay Debt Outstanding To MFs
Abhishek Gupta & Gaurie Mishra NEW DELHI
CASH-STRAPPED realty major Unitech is looking at raising around Rs 1,250 crore through a qualified institutional placement (QIP), according to domestic institutional investors.
The QIP proceeds are likely to be used to partially repay the Rs 500-crore debt outstandings to mutual funds which is due on April 19.
According to some institutional investors, Unitech is hoping to close the issue next week. It has already made the presentations to investors such as SBI, LIC and HDFC. If it goes through at Unitech’s present valuation – it’s current marketcap is Rs 6,824 crore –the QIP could result in a 10-15% stake dilution in the company. Unitech shares rose by 7% during to close at Rs 42.10 on Thursday.
When contacted by ET, the Unitech spokesperson declined to comment on the company's fund raising plans
According to an executive of a major fund house, Unitech executive have told mutual funds that they will use the QIP proceeds to substantially repay the Rs 500-crore debt to MFs that is due later this month.
Unitech has simultaneously also been in talks with mutual funds to roll over the Rs 500-crore debt that was due for repayment on April 19. According to a source close to the development, several mutual funds have agreed to roll-over Unitech’s debt if the realty major does not go through the QIP.
Officials in the banking circuit told ET that MFs and Unitech had mutually agreed to rollover debt for 12-18 months for an interest rate of around 16%. The final agreements will only be signed close to the date of maturity.
People with knowledge of the development said that the QIP issue will happen at around Rs 40 per share. This is Unitech’s second attempt at raising equity through the QIP route. The company tried to raise over $1billion in January 2008 at over Rs 500 a share, but abandoned the plan.
The company has been trying to raise cash by selling its assets.
Till now, it has been successful in selling a single hotel property in Gurgaon for around Rs 230 crore. The company is also looking to raise atleast Rs 500 crore by selling its office property in Saket. It is also trying to sell its hotel properties across India, as well as service apartments and school plots in the NCR.
According to a recent analyst report by Motilal Oswal, Unitech would need Rs 2000-2500 crore to recapitalise its balance sheet.
If the company manages to raise the requisite cash, the risk outlook towards it would decline significantly, the report added.
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