Unitech Ltd, a prominent player in the real estate sector, announced on Monday its intention to raise as much as Rs 5,000 crore through the issuance of various securities. The company described this as an "enabling resolution," which comes after a prior resolution expired, although specifics regarding the fundraising were not disclosed at this time.
On the Bombay Stock Exchange (BSE), Unitech Ltd's shares witnessed a notable increase, closing 3.4% higher at Rs 45.75 on Monday.
In a formal notice to the BSE, the company shared that in addition to pursuing long-term funding options, its Board of Directors has approved raising the authorized share capital from Rs 500 crore to Rs 1,000 crore. To seek shareholder consent for these proposals, Unitech has scheduled an Extraordinary General Meeting (EGM) for January 19, 2009.
A senior official from the company noted, "It is an enabling resolution that we would like to keep at any point so whenever we need, we can raise funds. At this point, there are no specific plans and the markets too are not favorable, but things could improve over the next one year."
It is relevant to mention that Unitech Ltd is aiming to collect up to Rs 4,000 crore through asset sales and equity from various sources to help reduce its substantial Rs 8,400 crore debt ahead of the deadline in March 2009. This financial strategy includes transferring approximately Rs 1,200 crore worth of loans to Unitech Wireless, raising between Rs 1,200 crore and Rs 1,500 crore through the divestment of hotels and office properties, and securing Rs 1,000 crore through private equity investments dedicated to residential projects.