Lok Hsg Backtracks On Dividend Issue Under Pressure

their interest dues have been cleared.

However, Lok Housing chairman and managing director, Lalit Gandhi, said the primary reason for the company's decision to skip dividend, after having initially decided to pay a hefty one, was taken due to the absence of a buyer for the firm's Jaipur hotel property.

The Jaipur hotel, acquired in 1994, as part of the group's proposed diversification into the hospitality business is currently valued at Rs 27 crore.

Gandhi explained that the company has now put up for sale all the hotels acquired by it for a proposed diversification into the hospitality business.

The total value of all the hotels is estimated at around Rs 75 crore.

 

Despite the slump in the real estate business, which led to a slide in the company's profits from Rs 21.20 crore recorded in 1994-95 to Rs 17.47 crore last year, the company had earlier proposed a 35 per cent dividend for 1995-96, as against the 30 per cent declared in the previousfinancial year.

A 35 per cent dividend payout was proposed on the assumption that the Jaipur property

deal would be finalised before the filing of notice for the annual general meeting. However, the sell-off plans did not materialise by then and we had to skip the dividend for the time being, Gandhi said.

According to the Lok Housing company chairman, the banks, financial institutions and housing finance companies did take up the issue of clearance of outstanding interest amounts, but there were no external pressures applied to withhold dividend payment.

However, the housing finance companies said they had warned the company top brass that any move to pay dividend without clearing their dues would meet with tough resistance.

The company has a loan exposure of around Rs 70 crore with banks and financial institutions. The interest burden amounts to around Rs 10 crore.

Lok Housing, meanwhile, has decided to shelve its diversification plans into the hospitality business.

The company is at present on the lookout for prospective buyers for its hotel plots located at Cochin, Goa, Bangalore and Jaipur.

The properties have been valued at Rs 75 crore and the sale proceeds will significantly augment our fund flow problem, Gandhi added.

To add to Lok Housing's woes, the Credit Rating and Information Services of India has taken a decision to downgrade its Rs 80-crore non-convertible debentures and the fixed deposit programmes of the company.