BackUnitech to raise $250 mn through QIP to repay debt
Unitech to raise $250 mn through QIP to repay debt
PremiumGauging market: Unitech’s corporate office in Gurgaon. Ramesh Pathania / Mint
New Delhi: Property developer Unitech Ltd plans to raise around $250 million (around Rs1,248 crore) through a so-called qualified institutional placement, or QIP, a person familiar with the development said. The company is looking to raise funds to repay debt and fund projects that are under way.
A QIP is a private placement of equity shares or securities convertible to equity by a listed company with qualified institutional buyers approved by the market regulator Securities and Exchange Board of India.
Unitech’s shareholders on 19 January approved the raising of additional long-term funds up to Rs5,000 crore through measures such as sale of global depository receipts and QIP.
Shareholders also approved an increase in the firm’s authorized share capital to Rs1,000 crore from Rs500 crore. The amount would be raised through an issue of fresh equity and convertible debentures, among other instruments.
Unitech had initially planned a QIP in January 2008. The company had even taken shareholders’ approval for the issuance of 200 million shares to increase the paid-up share capital of the company. Unitech was expected to raise $1.5 billion through this route in the first quarter of 2008. The company was forced to scrap the plan in March 2008 because of market volatility.
In February, Unitech informed the stock exchanges that its promoters had pledged 49.48% of their total 64.4% shareholding in the company.
Unitech recently partly repaid and restructured debt of around Rs2,500 crore that was due to mature by 31 March. The firm’s total debt before the exercise was around Rs8,000 crore.
Unitech’s shares on Thursday closed at Rs42.05, up 6.86% on the Bombay Stock Exchange, while the benchmark index, Sensex, ended up 0.57%.
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