Parsvnath sells Gurgaon township development rights to Supertech

Realty firm Parsvnath Developers has sold development rights of its township project in Gurgaon to another builder, Supertech, for an estimated Rs700 crore, mainly in order to cut its debt.

In a filing with the Bombay Stock Exchange on Thursday, Parsvnath Developers said, "The company has entered into a transaction with Supertech Ltd, in terms of which the company has transferred the development rights held by it in the township project at Sohna Road, Gurgaon."

Parsvnath has also transferred its shareholding in Honey Builders Ltd, with whom the company has held joint development rights in this project to Supertech, the filing added.

The company did not give financial details, but reports said Parsvnath has about 140 acres of land in this township project, of which about 100 acres are licensed. The transaction value is estimated at about Rs700 crore, they added.

Parsvnath Developers chairman Pradeep Jain was not immediately available for comments.

The company's debt currently stands at about Rs1,200 crore. The sale is also meant to fast-track execution of ongoing projects estimated at 80 million sq feet.

In June, the company had announced plans to either sell the land parcels worth Rs1,000 crore in southern and western India or form joint ventures with local builders for development.

In the company's annual report, Jain told shareholders that the company has laid out clear priorities for the next 12-24 months to improve profitability.

"The strategic focus is on assessing and evaluating our assets, business and markets, and accordingly sell non-core assets that are not aligned with our core business in terms of development potential. We are also working towards asset monetisation by raising long-term capital to reduce the debt," Jain said.

Parsvnath plans to raise up to Rs1,000 crore through private placement of non-convertible debentures (NCDs) and is also looking at selling non-core assets to reduce debt.

The company has called an annual general meeting on 23 September to seek shareholders' approval on a special resolution related to the private placement of NCDs.

Parsvnath Developers reported a 61 per cent fall in consolidated net profit to Rs6.14 crore for the quarter ended June as against Rs15.55 crore in the year-ago period.

Total income from operations fell by 49 per cent to Rs96.34 crore in the first quarter of this fiscal as against Rs 188.86 crore in the corresponding period of previous year.