Sobha explores PE, QIP routes to raise money

Sobha explores PE, QIP routes to raise money
The Economic Times, June 24, 2009, Page 4

J Padmapriya & Boby Kurian BANGALORE

REAL estate major Sobha Developers is in talks with private equity players such as J P Morgan, Actis and IL&FS for a stake sale in some of its projects to raise much-needed money. The Bangalore-based firm is also planning a QIP to reduce debt burden by almost Rs 800 crore in this fiscal, sources said.

The capital raised through QIP is aimed at paying off its debt while roping in financial investors at SPV level is about kick-starting certain projects with near-term development horizon. Sobha Developers carries a debt in the region of Rs 1,850 crore, and the promoters, who hold 87% stake, maybe open to diluting their holding by 26%, to raise cash.

Sobha is looking to raise up to Rs 1,500 crore via the QIP route in the coming weeks. The exact quantum of mop up would be announced soon. The developer has been looking at a three-pronged approach—QIP at entity level, SPV deals and divesting some its land bank assets - in its capital raising plans. Sources said the first two options looked brighter.