Lodha group arranges $325 mn to repay bonds maturing in March 2020

It has a total debt of over Rs 19,000 cr, of which Rs 17,000 cr is from India business and rest from London market, but Lodha exuded confidence that it would become net debt free in the next 2 years

Realty firm Lodha Group has arranged $ 325 million (about Rs 2,300 crore) to repay bonds maturing in March next year through infusion of funds from promoters, sale of commercial properties and refinancing against unsold inventories in London projects, its MD Abhishek Lodha said on Tuesday.

The Mumbai-based group has a total debt of over Rs 19,000 crore, of which Rs 17,000 crore is from India business and the rest from London market, but Lodha exuded confidence that it would become net debt free in the next two years.

"Our $ 325 million bond pertaining to London business is maturing in March next year. So we have arranged funds in advance to meet our obligations when bonds mature. About $ 155 million has been arranged through financing against unsold inventories in a London project, while another $ 110 million will be infused by promoters through family offices," Lodha told PTI.

Another $ 60 million fund would come through surplus from recent sale of commercial property in Mumbai, he added. The company sold 8 lakh sq ft office space for Rs 1,350 crore.

When asked about debt concern, Lodha said: "Debt is definitely a concern, therefore we are reducing it gradually and getting better every day".

The company is reducing its debt from sales collections, he said, adding that the receivables from customers are higher than the estimated construction spend.

On operational performance of India business, he said the company has sold properties worth about Rs 4,000 crore during April-October, 2019-20 and expects it to reach Rs 7,000 crore, same level as last financial year's.

In the last month, Lodha said the company sold properties worth Rs 750 crore driven by higher demand for its newly launched affordable housing projects.

Recently, Lodha group invested Rs 2,500 crore to develop three affordable housing projects in the Mumbai Metropolitan Region (MMR) in a price range of Rs 25-50 lakh per unit. These three projects, comprising nearly 9,000 units, are located at Thane, Bhiwandi and Taloja and launched under a separate brand, ''Crown''.

On the London business, Lodha said the company has already completed one project and the second one would be handed over by March next year.

The company has sold about half of its inventories in these two projects and is targeting to sell all units in the next 12-18 months, he added.

Lodha group had made a foray into the London market in 2013 with the acquisition of the landmark MacDonald House at 1 Grosvenor Square in prime Central London for over 300 million pounds (Rs 3,100 crore). The group acquired another site in prime Central London, New Court at 48 Carey Street for 90 million pounds in 2014.

The first project Lincoln Square was launched in 2016 while the second project 'No.1 Grosvenor Square' started in 2017.

Lodha Group is India''s largest residential real estate developer by sales and construction area. The company clocked net new sales of over Rs 7,000 crore in 2018-19 with collections of over Rs 9,000 crore.