Unitech Repays Rs 200-Crore Loan to Indiabulls Financial Services
Real estate player Unitech has successfully raised around Rs 200 crore through partial monetisation of assets and internal debt restructuring. This fund was used to pay back a 45-day debt taken from Indiabulls Financial Services (IBFSL), with the deadline being November 17.
Payment and Collateral Release
Sources at Unitech revealed that the money from the escrow was handed over to IBFSL on Monday. Following this payment, the collaterals that Unitech had pledged with Indiabulls to secure the debt will be released back to the company. With this payment, Unitech no longer has any outstanding debt towards IBFSL.
Confirmation from Indiabulls
Indiabulls founder Gagan Banga confirmed that Unitech has cleared its loan within the stipulated time. "Unitech had pledged some flats and hotels against the loan," informed Mr. Banga. However, he did not confirm the amount of the loan that was raised.
Unitech's Financial Situation
Unitech's total net debt as of June 30, 2008, was around Rs 7,700 crore. Earlier this month, the company had put its 2,00,000 square feet commercial office building in Saket, New Delhi, on the block. This property is expected to fetch upwards of Rs 600 crore.
Other Asset Sales
Sources also mentioned that Unitech is looking for buyers for its under-construction hotel in Gurgaon, valued close to Rs 300 crore.
Stock Performance
Unitech’s stock has dropped significantly, from a 52-week high of Rs 546.80 on January 2 to a low of Rs 26.60 on October 24. Its shares closed at Rs 42.75 on the Bombay Stock Exchange, down 6.56% from its previous closing of Rs 45.75.
Industry Impact
The overall slowdown, coupled with increased home loan rates, has led to a gradual slowing down of sales in the real estate sector. Many real estate developers are cash-strapped and are exploring avenues to raise capital. With bank lending becoming tight and private equity players being cautious, the primary option for real estate companies has been to monetise their assets. Market sources indicate that several such deals are available, but investor interest is currently low.