Lodha Developers International Ltd, a subsidiary of Lodha Group, has announced a buyback programme for its senior dollar-denominated bonds, which are due in 2020.
The Mumbai-based real estate firm on Tuesday said it has appointed J.P. Morgan Securities Plc to commence the buyback programme and repurchase up to $65 million or 20% of the $325 million outstanding bonds with 12% coupon listed on Singapore Stock Exchange.
“The purpose of the purchase of the 2020 Bonds is for the company to provide liquidity to the 2020 Bond holders, proactively manage its capital structure and reduce gross debt and leverage," Lodha said in a statement.
The buyback of these senior notes will be financed by the company from its currently available funds.
It is expected that the bond repurchase arrangements will start from Tuesday. In accordance with the terms and conditions of the 2020 bonds, the purchased 2020 bonds may either be cancelled or held until their maturity date.
Lodha Developers International had issued the dollar bonds in two tranches. In the first tranche, the company had raised $200 million at 12% coupon rate in 2015-16 and the second tranche of $125 million at 8.9% coupon was raised in late 2017.
Last April, Lodha Developers Ltd had filed its draft prospectus to raise around ₹5,500 crore through an initial public offering (IPO) and received Securities & Exchange Board of India’s approval for the IPO in July. Given the unfavourable stock market conditions, Lodha is expected to hit the market only this year now, and may reduce the size of the IPO, two people familiar with the development said.
Lodha’s consolidated debt is around ₹18,000 crore and in July, it had said it would use around ₹4,500 crore from the proceeds of the IPO to reduce debt.
In November, Lodha said it will raise just under ₹5,000 crore, by sale of its equity interest in its two projects in London for around ₹4,200 crore and the remaining through private equity funding for projects in India.
Lodha’s exit from its under-construction London projects – 1 Grosvenor House and Lincoln Square- would mean that the developer will now solely focus on its domestic projects, which are mainly located in Mumbai Metropolitan Region (MMR).