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Unitech honors its obligations, repays Rs 200-crore loan to Indiabulls

Submitted by on Tuesday, 18 November 2008No Comment

Real estate player Unitech has raised around Rs 200 crore through monetisation of assets and internal restructuring within the group to pay back the 45-day debt to Indiabulls Financial Services (IBFSL). The deadline to pay back the debt was November 17.

Sources at Unitech revealed that money has been handed over to Indiabulls on Monday. After this, collaterals that Unitech had pledged with Indiabulls to secure the debt will be released to the company. With this payment, the company does not have any outstanding debt to Indiabulls. Indiabulls founder, Mr. Gagan Banga confirmed that Unitech has cleared its loan, which was taken 45 days back (early October) within the stipulated time.

Unitech had pledged some flats and hotels against the loan,” informed Mr Banga. He, however, did not confirm the amount of loan that was raised. Unitech’s total net debt as of June 30, 2008, was around Rs 7,700 crore. Earlier this month, the company had put its 2,00,000 sq ft commercial office building in Saket, New Delhi, on the block, which is expected to fetch upwards of Rs 600 crore.

Sources said that Unitech is also looking for buyers for its underconstruction hotel in Gurgaon, which is valued close to Rs 300 crore. Unitech’s stock has dropped from a 52-week high of Rs 546.80 on January 2 to a low of Rs 26.60 on October 24. Its shares closed at Rs 42.75 on the BSE, down 6.56% from its previous closing of Rs 45.75.

The overall slowdown along with the increased home loan rates has translated into gradual slowing down of sales in the real estate sector. Most real estate developers today are cash-strapped and are looking at avenues of raising capital.

With bank lending becoming tight over the months and private equity players getting overcautious, the only way out for real estate companies has been to monetise their assets. Market sources indicate that a number of such deals are in the market, but investor interest is very low at the moment.

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