New Delhi: India’s largest property developer by market value, DLF Ltd, has reshuffled a part of its growing debt by replacing short-term loans with borrowings that mature later and carry a lower rate of interest.
It had borrowed Rs1,000 crore from Punjab National Bank and Rs750 crore from Life Insurance Corp. of India in December at 13-14% and repaid up to Rs1,100 crore of short-term debt.
“We have taken long-term debt from within India to replace our short-term foreign debt, which we had taken at a higher rate of interest,” group executive director Rajiv Talwar said on Monday.
The new loans do not add to the firm’s debts as one type of loan replaces the other. TV channel CNBC-TV18 reported the new loans on Monday.
DLF had a consolidated debt of around Rs14,000 crore as of September 2008. According to credit rating agency Fitch, some Rs6,500 crore has to be repaid in 2009.
Talwar said that DLF is not restructuring its debt. “Restructuring happens when you are close to defaulting on the loan payment,” he said. “We are not facing such a situation.”
Smaller developers, such as Omaxe Ltd, are however, looking to restructure debt. “We are in the process of demanding a debt restructuring,” Sunil Malhotra, chief financial officer of Omaxe, said. “We will decide on the amount of loan to be restructured and the time in the next 10 days.” The company has a debt of Rs1,700 crore. Around Rs150 crore of this and some loan instalments are due this fiscal year, which might need to be deferred, Malhotra said.
Parsvnath Developers Ltd could not be reached though its chairman Pradeep Jain had earlier welcomed banks’ move to restructure loans.
Unitech Ltd did not respond to mails or text messages with questions on debt restructuring. It needs to repay Rs2,500 crore by March this year.
Unitech is looking to raise money from private equity funds and by selling its hotel, retail and commercial assets, R. Nagaraju, general manager (corporate planning and strategy), had earlier told Mint.