Unitech sells office space for Rs 500 cr

Located in Saket, New Delhi, the property’s sale is part of a plan to sell assets and cut debt.

Unitech Ltd, the country's second-biggest property developer, says it has sold office space in Saket, New Delhi, for Rs 500 crore as part of a plan to raise money from asset sales to repay debt.

The sold property, which was originally built as the company's corporate office, has gone to a wealthy individual. The entire money is expected to be received by June, an informed source said.

The realtor had been negotiating the office property’s sale for a few months and had finally closed the deal, the source said. A company spokesperson declined to comment.

This is the second such sale by the Sanjay Chandra-managed company in the past two months. Unitech raised Rs 231 crore in April from the sale of its 199-room Marriott Courtyard hotel in Gurgaon for Rs 231 crore to a Delhi-based auto dealer, Roop Madan.

Unitech, DLF and other real estate developers are stepping up asset sales to cut debt and generate cash to complete unfinished projects. Realtors relied heavily on borrowed funds to spur expansion but were caught in a trap after a global slowdown curbed demand for office, shop and residential properties.

Unitech has about Rs 7,800 crore of debt on its books and plans to cut this by at least Rs 1,000 crore by the end of this fiscal year. Most of the repayment is expected to come from additional capital infusion into the company by promoters and by asset sales.

The company aims to raise Rs 1,600 crore in the fiscal year ending March 31 from the sale of non-core assets, including the Saket office complex and four additional hotel properties located in Noida, Kolkata and Gurgaon. The developer had earlier indicated plans to raise at least Rs 900 crore by June from such asset sales.

"The cash flow from asset sales will put the company's financial condition back on track," said a Mumbai-based analyst.

Unitech's promoters raised Rs 1,625 crore in April from the sale of shares to qualified institutional investors. The company's board yesterday approved a plan to allow the promoters to infuse an additional Rs 1,000 crore through issue of warrants that are convertible into shares at a later date.