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« Luxury Real Estate Projects Fail to Get Buyers | Home | DLF Requests Govt to De-notify 4 SEZ Projects »

Unitech raises $325 m by Selling Fresh Shares to Institutional Investors

Real estate company Unitech has raised nearly $325 million by selling fresh shares to institutional investors via a qualified institutional placement (QIP) on Thursday. Sources said that the shares were placed at Rs 38.50 each. “About 95 per cent of the issue has been placed with FIIs including HSBC, Prudential, Orient Global, Sandstone Capital and Och-ziff. The balance has been with the domestic funds. The response to the QIP was strong,” sources said. Sources pointed out that 42 crore new shares were being issued for the QIP, and the promoter holding is likely to be diluted to 51 per cent. Unitech promoters previously held nearly 64 per cent stake. Since early this month, Unitech has been holding discussions with financial institutions to gauge investor interest for the QIP. Top officials of Unitech including its Managing Director, Sanjay Chandra, were interacting with investors in Mumbaiin preparation of the proposed issue.

The company, which is facing a huge financial crunch and has nearly Rs 8,000 crore debt on its balance sheet, roped in IDFC SSKI to manage the QIP issue. Sources familiar with the process said that the proceeds of the QIP would largely be utilised to service the company’s debt. The shares of Unitech closed 9.7 per cent lower at Rs 43.35 on the Bombay Stock Exchange on Thursday. It had hit a high of Rs 338 on May 5, 2008 and a low of Rs 21.80 on November 28, 2008.

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