Sobha Developers to raise Rs 1,400 cr by selling land parcelsSobha Developers Ltd is working hard to raise about Rs 1,200-1,400 crore by selling part of its land parcels in a bid to reduce its outstanding debt.

The developer has a time line of around two years to raise funds and is looking at outright sale or by selling stake to private equity investors.

The cost of acquisition of the land that the company plans sell was around Rs 600-800 crore.

The plots identified are 100 acres in Pune, 38 acres in Bangalore and around 300 acres in Kochi and adjoining villages.

For its Bangalore land parcels, Sobha is in advanced talks with other regional developers.

With land asset sales and cash flow from existing projects, the developer will reduce its gross debt from about Rs 2,000 crore to Rs 1,300 crore by end of current fiscal and to Rs 600 crore by end of next fiscal.

Recently, Sobha sold a land parcel to private equity investor Purna Partners, for about Rs 200 crore, for developing new projects.

The developer has also raised $110 million by diluting 22.5% stake in the company through qualified institutional placement of shares to investors. It has already paid about Rs 370 crore from the funds raised to its debtors.

With the QIP, the developer has been successful in reducing its debt equity ratio from 1.7 to 0.85. It is looking to offer of more than 2 million square feet of new projects this fiscal.

With the QIP, the developer has been successful in reducing its debt equity ratio from 1.7 to 0.85. It is looking to offer more than 2 million square feet of new projects this fiscal. A source had earlier told DNA Sobha is looking to spin off businesses such as interiors and wooden furniture, building materials, mattresses and a design
studio.

Source:DNA, Friday, July 17, 2009