Parsvnath asks banks for 9-12 month breather on loans

Realty firm Parsvnath Developers today said it has approached banks for 9-12 months' breather on paying instalments of its existing debt, and plans to utilise the additional liquidity on timely completion of current projects.

"We are asking for rescheduling the ongoing installments for our debts and are requesting for a moratorium of 9-12 months," Parsvnath Developers Chairman Pradeep Jain told PTI.

The company would utilise the additional liquidity that can be generated out of the adjustments to quickly complete the current projects, he added.

The company's net debt as on December 31, 2008, stood at Rs 1,825 crore with an average interest cost of 13.59 per cent.

"Our focus is on existing projects. We are not buying any new projects except the land adjacent to our projects," Jain said.

Jain also said the company may raise funds from private equity players project by project.

Asked about its retail plans, Jain said, "In today's economic scenario, we have put on hold our retail expansion."

During the third quarter ended December 2008, the realty firm reported a sharp fall of 95.18 per cent in its consolidated net profit at Rs 5.42 crore, on account of declining sales and high interest cost.

The company had posted a net profit of Rs 112.57 crore in the third quarter of the previous financial year, Parsvnath Developers said in a statement.

Total income also declined to Rs 98.01 crore from Rs 497.10 crore during the period under review, a dip of 80.28 per cent, it added.

"The reason for decline is on account of pressure on sales, reduced turnover, coupled with the burden of fixed overheads like increased interest cost and personnel cost," Parsvnath had said.

Total expenditure as a percentage of sales has gone up by 17 per cent, resulting in reduced margins, it said.

"Industries across sectors have witnessed a slowdown in the current macro-economic environment. The real estate sector is no exception and there has been a cascading negative impact on customers' sentiment," Parsvnath Developers Chairman Pradeep Jain said.

The negative sentiment among customers has forced the firms to either defer investments or reduce spending, given the current liquidity positions, he said.

During the nine months ended December last year, Parsvnath recorded a 68.10 per cent dip in its consolidated net profit at Rs 101.29 crore as against Rs 317.52 crore in the year-ago period.

Total income in the nine-month period in this financial year stood at Rs 705.12 crore, while the same was at Rs 1,324.27 crore in the corresponding period in FY '08, down 46.75 per cent, the company said.