Unitech looking to sell telecom tower business: report
04 August 2009
Indian property developer Unitech Ltd is trying to sell its telecom tower-making business for up to Rs700-750 crore as part of its deleveraging initiatives, according to a report in the the Daily News & Analysis.
Unitech, which has been hit by high debt, sluggish demand and a crash in property prices, has been looking to raise capital by selling shares and assets such as hotels and office property. It currently has a debt of around Rs 7,000 crore.
In the quarter ended June, it raised $900 million through two placements to institutions. It also raised about Rs1,000 crore from non-core asset sales. Its total loans outstanding at the end of the quarter stood at Rs8,260 crore.
The DNA report, quoting unnamed sources, said no details were available on the potential buyers. The telecom tower manufacturing facility is based near Nagpur in Maharashtra. This subsidiary initially operated through a tie-up with Hyundai. Unitech acquired the partner's stake some years back.
Unitech has been planning to sell its non-core assets like hotels, commercial properties and land plots to reduce its debt. It has already sold a commercial office in Saket, south Delhi, for about Rs500 crore, a Gurgaon hotel for Rs230 crore and some school plots for Rs35 crore.
The Delhi-based land developer recently raised about $850 million through qualified institutional placement of shares, and said it would use a part of the funds and the money raised by selling non-core assets to bring down debt to Rs4,000 crore by the end of the current fiscal.
Unitech would use the remaining funds to expand its 'affordable housing' portfolio. It plans to sell over 20,000 homes this year under its Uni Homes brand. It has launched nine million sq ft of projects, worth Rs3,500 crore, between April and May, and has sold over 3,000 units.