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Unitech to raise funds,Sobha faces risk

Unitech Ltd has convinced shareholders to raise up to Rs 5,000 crore through the issue of securities...

Written by Express News Service | New Delhi | Mumbai | Published: January 20, 2009 2:52:35 am

Unitech Ltd has convinced shareholders to raise up to Rs 5,000 crore through the issue of securities. The country’s second-largest realty firm has already rescheduled about three-fourth of its existing debt maturing this fiscal. Another real-estate firm is facing a downgraqde after Unitech. Sobha Developers Ltd is facing a liquidity risk that could impact its ability to repay the company’s debt obligations in the short-term,rating agency Fitch said.

After Unitech made its announcement today the company’s shares closed at Rs 31.90,up 5.98 per cent after recovering from an intra-day fall of over 14 per cent. “We have to repay only 20-25 per cent of Rs 2,500 crore,which is to be paid by March 2009,” Unitech managing director Sanjay Chandra said. Speaking about the shareholders’ approval,he added,“It’s a blanket resolution which enables us to raise funds through various securities.” He said the company would raise capital for further growth if the right opportunity comes and is flexible to dilution of the stake as per the need of the company.

While placing Sobha Developers’ rating on short-term debt on ‘Rating Watch Negative’,Fitch said,“The placement of the rating reflects the increasing liquidity risks for Sobha driven by a slowdown in residential demand and uncertainty related to infusion of equity through its proposed rights issue.” These risks could potentially impact Sobha’s ability to refinance/repay its debt obligations in the near term,it added.

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