BPTP plans to use one fourth of IPO funds for debt repayment
Business Standard, December 31, 2009, Page 4
Raghavendra Kamath / Mumbai
Delhi-based property developer BPTP plans to use over one-fourth of its initial public issue (IPO) proceeds towards repayment and prepayment of debt taken by the company, according to the draft red herring prospectus (DRHP) filed by the company with capital markets regulator Sebi.
BPTP, promoted by first-generation entrepreneur Kabul Chawla, shot to fame for winning the country’s largest land deal last year in Noida for Rs 5,006 crore and later surrendering 75 per cent of the land to New Okhla Industrial Development Authority (Noida) due to the meltdown in property markets. The company retained 21 acres, for which it paid Rs 1,300 crore to the authority.
Out of the Rs 1,500 crore it plans to raise from capital markets, the company says it will use Rs 325 crore towards debt prepayment and repayment, Rs 459.4 crore to finance construction and development costs for its Park Elite Floors, another Rs 514.3 crore for payment of development charges to the government authorities and the rest for general corporate purposes.
The company has a total debt of Rs 1,084 crore on books against a net worth of Rs 1476.76 crore, which translates into a debt-equity ratio of 0.73:1. The Rs 325-crore loan was selected for prepayment as it carried a high interest rate of 14 per cent, sources in the know said.
BPTP’s profits closely reflect the ups and downs in the property markets in the last couple of years. While net profit jumped 18 per cent in the financial year 2008, BPTP saw a net loss of Rs 84.69 crore in the current year, mainly due to allotment money of Rs 123.94 crore and Rs 29.32 crore forgone on account of interest paid on delayed payments in the Noida deal. But the company again posted a net profit of Rs 83.2 crore in just three months ending June 30, 2009.
Citigroup Property Investors (CPI), which has a stake of 5.98 per cent in the company, and JPMorgan, which has 3.68 per cent, are likely to continue in BPTP as investors as they have a lock-in period of one year after the listing of shares, according to sources in the know. Though CPI wanted to exit its investment through the special purpose vehicle (SPV) route, it has put the plan on hold, sources said.
As of December 2, 2009, the company had 17 ongoing projects with a saleable area of 39.39 million square feet and 40 new upcoming projects of 57.14 million square feet. The company says it has launched four residential projects in the low-rise segment and sold 7,398 apartments between July 2008 and September 2009. The company has a total land bank of around 1,800 acres, of which 1,415 acres form a part of Project Parklands in Faridabad.
“Till the time they come up with a price band and percentage dilution in the IPO, it will be difficult to comment on the IPO. But the Rs 1,175 crore that the company plans to utilise for construction and development charges is a significant amount. It shows the company plans to launch a lot of projects,” says an analyst at a Mumbai-based brokerage on condition of anonymity.
Another analyst, who too declined to be identified, said the Rs 1,300 crore it paid for 21 acres was quite expensive in terms of current market conditions.
Business Standard, December 31, 2009, Page 4
Raghavendra Kamath / Mumbai
Delhi-based property developer BPTP plans to use over one-fourth of its initial public issue (IPO) proceeds towards repayment and prepayment of debt taken by the company, according to the draft red herring prospectus (DRHP) filed by the company with capital markets regulator Sebi.
BPTP, promoted by first-generation entrepreneur Kabul Chawla, shot to fame for winning the country’s largest land deal last year in Noida for Rs 5,006 crore and later surrendering 75 per cent of the land to New Okhla Industrial Development Authority (Noida) due to the meltdown in property markets. The company retained 21 acres, for which it paid Rs 1,300 crore to the authority.
Out of the Rs 1,500 crore it plans to raise from capital markets, the company says it will use Rs 325 crore towards debt prepayment and repayment, Rs 459.4 crore to finance construction and development costs for its Park Elite Floors, another Rs 514.3 crore for payment of development charges to the government authorities and the rest for general corporate purposes.
The company has a total debt of Rs 1,084 crore on books against a net worth of Rs 1476.76 crore, which translates into a debt-equity ratio of 0.73:1. The Rs 325-crore loan was selected for prepayment as it carried a high interest rate of 14 per cent, sources in the know said.
BPTP’s profits closely reflect the ups and downs in the property markets in the last couple of years. While net profit jumped 18 per cent in the financial year 2008, BPTP saw a net loss of Rs 84.69 crore in the current year, mainly due to allotment money of Rs 123.94 crore and Rs 29.32 crore forgone on account of interest paid on delayed payments in the Noida deal. But the company again posted a net profit of Rs 83.2 crore in just three months ending June 30, 2009.
Citigroup Property Investors (CPI), which has a stake of 5.98 per cent in the company, and JPMorgan, which has 3.68 per cent, are likely to continue in BPTP as investors as they have a lock-in period of one year after the listing of shares, according to sources in the know. Though CPI wanted to exit its investment through the special purpose vehicle (SPV) route, it has put the plan on hold, sources said.
As of December 2, 2009, the company had 17 ongoing projects with a saleable area of 39.39 million square feet and 40 new upcoming projects of 57.14 million square feet. The company says it has launched four residential projects in the low-rise segment and sold 7,398 apartments between July 2008 and September 2009. The company has a total land bank of around 1,800 acres, of which 1,415 acres form a part of Project Parklands in Faridabad.
“Till the time they come up with a price band and percentage dilution in the IPO, it will be difficult to comment on the IPO. But the Rs 1,175 crore that the company plans to utilise for construction and development charges is a significant amount. It shows the company plans to launch a lot of projects,” says an analyst at a Mumbai-based brokerage on condition of anonymity.
Another analyst, who too declined to be identified, said the Rs 1,300 crore it paid for 21 acres was quite expensive in terms of current market conditions.
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