Century Real Estate, the Bangalore-based real estate developer with a massive 3,000 acres of land bank across the city, is understood to be close to raising around Rs 400 crore to refinance its existing debt.
The company is in talks with a clutch of NBFCs as well as private equity funds to tie this up which is expected to be in place before end of next month.
The company, which started as a land bank aggregator during 1973, has over the past nearly five years been focussing on developing a part of its land bank and has lined up projects spread over 10 million square feet which is expected to be delivered over a period. Century Real Estate's land bank is estimated to be valued at around $2 billion.
The management of Century Real Estate declined to comment on the latest fund raise. The company earlier this year had some problems in redeeming NCDs, which has since been more or less settled. As part of its fund raise through the NCD route, Century had relied on Reliance Capital, Kotak Realty Fund and JM Financial to raise upwards of Rs 400 crore over the past couple of years.
Global private equity funds including Goldman Sachs and Fortress were among the funds which had invested substantially earlier. It is understood that Century is in various stages of giving an exit to the PE funds by buying back partially and restructuring the rest as it tries to come out of a blip in its operations.
According to senior investment bankers specialising in the real estate sector, Century Real Estate has term sheets for around Rs 600 crore for the fresh refinancing and the company should be finalising for around Rs 350 crore in the near future.
The real estate market in Bangalore has been steadily growing despite various problems in various other cities due to weak offtake in the residential segment.
As a result of this, PE investments dropped by 46% to $276 million in the first half of 2013 as compared to the year ago period, but funds worth $2 billion are still available to be deployed in the sector, Cushman & Wakefield noted in a recent report.