India’s second-largest real estate company Unitech will raise $700 million through Foreign Currency Convertible Bonds (FCCBs). The company has sought approval from the Department of Industrial Policy and Planning (DIPP) and the Reserve Bank of India to raise the fund through convertible instruments. The company has assured the government that the fund will be used for an integrated township and not for repaying existing debts.
This is the 3rd time in 1 year span that Unitech is planning to raise funds. In March 2009, the company raised $325 million (Rs.1250 Cr) at Rs.38.50 per share. After that, it has raised $900 million (Rs.4000 Cr) through two rounds of QIPs at Rs.62 per share & Rs.82 per share. Both the times company has got good response. Now, for this round let’s wait & watch. Already there is a rumor going on about Dubai Realty fiasco, which has affected markets all over the world today.
Part of these funds have been used to repay its debts. The company had a total debt of over Rs.10,000Cr. After adjusting the debts toward telecom venture, it had a residual debt of Rs.8,600Cr before the QIP placement in March 2009. Its current debt is around Rs.6,300Cr, that means the company has repaid a debt of Rs.2,300 Cr and the balance amount was used for implementing projects.
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