IL&FS Trust Company gets a 5.85 per cent stake.
Unitech’s cup of woes continues to brim over. The cash-strapped real estate company is facing margin calls from lenders on pledged shares.
It is already in the dock for gaining from unlawful allotment of telecom licences in 2008. Chairman Sanjay Chandra was yesterday sent to jail in the case.
People in the know said some investors and lenders with whom Unitech promoters had pledged shares made margin calls after the shares were hammered in the first three months of the calendar year. Since January 1, Unitech shares have fallen nearly 38 per cent.
In a notice to the National Stock Exchange on Thursday, IL&FS Trust Company said it had “acquired” a 5.85 per cent stake in Unitech on March 18. “Equity shares of Unitech have been pledged with IL&FS Trust Company in capacity as Debenture Trustee for debentures issued by Harsil Projects,” it said. Harsil Projects is a promoter of Unitech.
“In the last quarter, all real estate stocks, including Unitech’s, have declined because of a weak market. The lenders have asked for additional repayments and collaterals. The promoters have either repaid or provided the additional collateral,” he told Business Standard.
When a margin call is initiated, a company has to either pay cash or pledge more shares.
On December 31 2010, the promoters held 48.57 per cent in the company. They had pledged 68.38 per cent of their shares, or 33 per cent of the total equity of the company. The latest number of pledged shares was not available.
The official said Unitech had met its obligations and there was no disagreement with the lenders. “Not a single share of Unitech has been sold in the market by its lenders,” he said.
Analysts said the promoters would find it difficult to provide any additional collateral as they had already pledged a majority of their shares.
Unitech had a debt of Rs 4,600 crore on December-end.
In February, Unitech got a court order preventing Morgan Stanley from selling shares pledged with it after the company failed to provide additional securities in the wake of a dip in the share price. Unitech later said it repaid Morgan Stanley and redeemed the pledged shares.
“When Unitech got the stay order, it created ripples in the market, as lenders are entitled to sell pledged shares if the company does not meet the margin requirement. I don’t think it is possible to prevent this every time,” said a real estate analyst.
