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PEs to fund Unitech projects

Unitech Ltd will raise about Rs 5,000 crore or $1.15 billion from private-equity firms over the next 12 months for its various commercial and hotel projects.

india Updated: Jun 27, 2008 20:14 IST

Unitech Ltd, the country’s second largest real estate company, will raise about Rs 5,000 crore or $1.15 billion from private-equity firms over the next 12 months for its various commercial and hotel projects.

Through equity route, at project level, the company plans to raise $350 million for its hotel venture and will also raise an additional $800 million for various commercial projects that it is executing in Mumbai, Sanjay Chandra, managing director, Unitech Ltd said on Friday.

The announcement comes at a time when a spike in inflation and rising interest rates have taken the sheen off the real estate sector and made investors wary of it.

Unitech, Chandra said, is setting up 35 hotels under various subsidiaries. Of this, 15 hotels would be clubbed together under one company for the achieving financial closure. “In the first phase, we are putting up 15 hotels with 2300 rooms at different locations. These would be three star and five star properties,” he said.

The company is expanding aggressively in Mumbai in the residential and commercial segments through a joint venture route. In the next two years, Mumbai region is expected to contribute about Rs 3000 crore in revenues, which should be around 50 per cent of the company’s total income, Chandra said.

The company is in discussion with strategic partners for diluting 26 per cent stake in its telecom arm to a strategic foreign partner. “We are looking for a minority dilution of 26 per cent stake to a strategic foreign player in Unitech Wireless,” Chandra said.

Unitech Wireless, has bagged a pan-India GSM license, has already got the spectrum for five circles and the company is planning to roll out telecom services by the last quarter of the current financial year, he said.

The company reported a 52 per cent decline in its net profit at Rs 360.28 crore for the quarter ended March 31, 2008, against Rs 747.96 crore in the same period a yearago. The total consolidated income for the January-March quarter declined by 26 per cent at Rs 1,197.13 crore, compared to Rs 1,627.29 crore in the same period last fiscal.

Chandra, however, said that the figures are not comparable as in the same period of the last financial year the company had sold four corporate parks to its group company Unitech Corporate Park, which was listed on Alternate Investment Markets (AIM) of London Stock Exchange (LSE).

“These were primarily land deals, in which the company had made a profit of around Rs 500 crore,” Chandra said.

For the financial year ended March 31, 2008 the company’s net profit registered a growth of 27 per cent at Rs 1,661.86 crore from Rs 1,305.83 crore in the previous fiscal.

Total income rose by 26 per cent at Rs 4,280.11 crore in 2007-08 as compared to Rs 3,388.09 crore in the previous fiscal. The board also recommended a dividend of 12.5 per cent for 2007-08 fiscal.