Housing Development & Infrastructure Ltd (HDIL), a Mumbai-based property developer, will sell shares worth $600 million (Rs 2,880 crore) to institutional buyers to reduce debt on its books, a top company official has said.
The move comes in the wake of nearly 33 per cent rise in the company’s debt, from Rs 31,12.74 crore 2007-08 to Rs 4143.31 crore in 2008-09.
Analysts expect the promoters to dilute 10-11 per cent of their holdings in the share sale. Promoters now hold 61.50 per cent stake in the company.
The company’s plans follow successful Qualified Institutional Placement (QIPs) issues by the country’s second -largest developer Unitech, which raised Rs 1,625 crore and Indiabulls Real Estate, which raised Rs 2,656 crore this week and stake sale by the country’s largest developer, DLF, to raise Rs 3,860 crore earlier this month.
“Developments since last Saturday gave us a lot of confidence. We have to take shareholder’s approval for the issue,’’ said Hariprakash Pande, deputy general manager, finance, HDIL, in a conference call with analysts today.
The HDIL board, which met today, has also decided to make preferential allotment of warrants to the promoters . The company did not specify the number of warrants it would issue and the conversion rate. The board has called a extra-ordinary meeting of shareholders on June 17 to take the shareholder nod for the QIP and preferential allotment of warrants.
The company has reported posted 91 per cent drop in its net profit for the fourth quarter as home and office property sales dropped in the country.
HDIL posted a net profit of Rs 61.92 crore for the quarter ended March 31, 2009 as compared with Rs 708.24 crore it posted in the corresponding quarter last year. The company’s total income fell 61 per cent to Rs 388.77 crore for the fourth quarter for FY 2009 as compared to Rs 989.49 crore it posted in the fourth quarter of FY 2008.
The consolidated annual profit of the company fell 44 per cent to Rs 786.53 crore in the fourth quarter of FY 2009 as compared with Rs 1409.84 crore it posted in the corresponding quarter of the previous financial year.
The company’s total revenues for the whole year also fell 27 per cent at Rs 1782.42 crore in the fourth quarter of FY 2009 as compared to Rs 2433.29 crore it posted in the corresponding quarter last year.
