Unitech plans to raise Rs 200 cr for ongoing housing projects

Realty firm Unitech plans to raise about Rs 200 crore from private equity players to part finance its ongoing housing projects as real estate market continues to remain sluggish.

Unitech has increased the pace of construction works significantly during last two months to complete ongoing housing projects and improve cash flow, its Mananging Director Sanjay Chandra told PTI.

The company has no plans to launch new housing projects this year and would focus on delivery of existing projects.

Chandra further said that the company has cleared about Rs 1,000 crore liabilities of telecom business and it would not have to service the telecom debt. Unitech had exited from the telecom joint venture with Telenor in October 2012 by selling its entire 32.75 per cent stake to the Norwegian firm.

"In the last two months, we have ramped up construction activities substantially and increased the labour force by four times. This has helped in improving the cash flow cycle," Chandra said.

To further accelerate construction work and delivery, he said the company is looking at raising funds at project level.

"We plan to raise Rs 150-200 crore funding through private equity and structured financing to meet the working capital need of our ongoing projects," Chandra said.

The company is in talks with some PE players and the deal is likely to be finalised in the next three months.

Unitech presently has ongoing projects in Delhi-NCR, Chennai, Bengaluru and Kolkata. It would raise funds in projects where substantial sales bookings have been achieved.

Asked about debt reduction plan, Chandra said: "We have retired all our telecom related liabilities during last fiscal aggregating almost Rs 1,000 crore rupees. Accordingly, our debt servicing requirement has come down to that extent".

He said the net debt, which stood at Rs 6,332 crore, would remain around same level this fiscal and would start coming down from 2016-17 ownwards as the real estate market improves.

On debt worries, Unitech's shares on June 3 fell by 35.27 per cent on the BSE. Intra-day, it had plunged 51.63 per cent.

Chandra said there is a "huge pent-up demand" for housing as people are on wait-and watch mode. He expected the market to pick up after further softening in interest rates.

The company has been facing problems in one of its housing projects in Gurgaon and it recently lost a case at the National Consumer Disputes Redressal Commission (NCDRC).

After being approached by the buyers in the project for delay in possession, the top consumer court ordered the company to pay a delay penalty of minimum 12 per cent.

According to Unitech, the matter relates to 24 people who have paid about Rs 11 crore towards booking of apartments.

During 2014-15 fiscal, Unitech's net loss stood at Rs 128.33 crore against Rs 69.74 crore profit in the previous year. Income from operations increased to Rs 3,431.18 crore in the last fiscal from Rs 2,953.44 crore in 2013-14.