|
| Emaar MGF to use over half of Rs 3,850 cr IPO to repay debt |
| Press Trust of India / New Delhi Oct 02, 2009, 15:20 IST |
|
Realty firm Emaar MGF, which plans to raise Rs 3,850 crore through an initial public offer, will utilise over half of this fund to repay its debt alone to strengthen its balance sheet.
Emaar MGF, a joint venture between Dubai-based Emaar Properties and domestic firm MGF, has a debt of Rs 5,807.79 crore as on August 31 and plans to utilise Rs 1,972.1 crore raised from the public in part repayment.
The repayment will also include the debt of special purpose vehicle (SPV) created by the company for developing the Commonwealth Games Villages — Emaar MGF Construction.
The realty major had filed its draft prospectus with market regulator Sebi to raise Rs 3,850 crore through an IPO on September 29.
"In order to deleverage its balance sheet, the company intends to repay Rs 1,772.6 crore of its outstanding debt from the proceeds of the fresh issue," the Draft Red Herring Prospectus (DRHP) of the company said.
Some of the lenders to the company include Unit Trust of India Mutual, HDFC, L&T Infrastructure Finance Company, Axis Bank, LIC, Citibank, ABN Amro Bank, HSBC and SBI.
"The company proposes to utilise a part of the proceeds of the fresh issue to the extent of Rs 199.5 crore for funding Emaar MGF Construction (the SPV), which proposes to utilise for the repayment and prepayment of loan facilities availed by it," the DRHP of Emaar MGF said.
Besides, the realty firm would pump in Rs 820 crore for redemption of certain redeemable preference shares. It would also invest Rs 276.8 crore in paying development and licence renewal charges.
The remaining part of the proceeds is proposed for general corporate purposes, including acquisition and brand building exercise.
Emaar MGF had filed its DRHP for the second time with Sebi to raise up to Rs 3,850 crore, much lower than what it had planned to mop up last year.
The company had planned to raise over Rs 7,000 crore last year through an IPO, but withdrew it due to poor market response, even after revising the price band downward after the offer.
Emaar MGF commenced its operations in the country in 2005. As of August 31, 2009, the company has a land bank of 11,340 acres. It has 29 projects, comprising saleable area of 26.3 million sq ft, under various stages of development.
The book running lead managers to the issue are Kotak Mahindra Capital, Deutsche Equities India, UBS Securities India, Credit Suisse Securities, HSBC Securities, ICICI Securities and RBS Equities.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
