Speculation Build Over Unitechs Debt repayment

January 20, 2009	(Be the first to rate this story!)  Loading ...
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Despite Delhi-based real estate company Unitech Ltd claiming to have reduced its debt obligation from Rs 2,500 crore to Rs 600 crore, investors –FIIs in particular –are selling the realtor’s shares in large numbers. At 1 pm, Unitech shares were trading 4 per ent lower at Rs 30.65 on the NSE. “Investors are not very comfortable with Unitech’s debt repayment claims; it is not clear how the company managed to cut debt from Rs 2,500 crore to Rs 600 crore. As a matter of fact, until a couple of weeks ago, the company was not in a position to recoup its pledged shares, which were eventually sold off by IFCI and Zicom,” said SMC Global Securities real estate analyst Arun Gupta.

“Unitech, like most other real estate stocks, has fallen drastically over the past few months. In the case of most real estate companies, there is large inventory pile-up, but not much of cash flows. With respect to Unitech, we’re not recommending investors to buy the company. We’re not expecting any major upside soon,” Mr Gupta added. Unitech had a total debt of Rs 8,300 crore on its balance sheet as of September, of which Rs 2,500 was supposed to be repaid by March 2009. Unitech MD Sanjay Chandra said over Rs 1,000 crore loan has been restructured so far, but didn’t give the exact figure. Some of the loans that have been rescheduled include those which were due after March. Without clarifying how much Unitech still owed its lenders following the repayment and restructuring of loans Mr Chandra said.

Unitech had raised Rs 900 crore at 19 per cent interest from 8-9 MF houses, including Reliance and Kotak, in November 2008. This was due for repayment on Monday. The company said it paid back a ’substantial’ amount on Saturday, while the rest was rolled over.

News Published Under:   Real Estate India |

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