| NEW DELHI
NEW DELHI Unitech Ltd, which the media reported on Friday raised $325 million in equity, is looking to sell more stock and assets such as hotels and offices to cut its high debt.
It also aims to shift its focus to building cheaper homes to beat an economic downturn and revive sales, the second-largest listed Indian property firm said in an investor presentation that was made made available to Reuters.
Unitech, whose shares fell almost 92 percent in 2008, on Thursday told the stock exchange it planned to raise up to $1 billion in equity, mainly to retire its debt that stood at 84 billion rupees ($1.7 billion), down 16 billion from September.
"High growth in industry prior to downturn led many developers to expand aggressively by resorting to high debt," Unitech said in the presentation.
The company said it was hit by high leverage of about 100 billion rupees last September, just as sales dipped to an all-time low.
"De-leveraging will remain a focus area to reduce the interest expense and to utilize the saved cash for project development," it said.
Last December, its board had approved to sell shares to institutions to raise up to 50 billion rupees ($1 billion) and media reports said on Friday Unitech had raised $325 million by selling shares at 38.50 rupees each.
Shares in Unitech, which has a market value of $1.4 billion, jumped about 22 percent to 52.8 rupees by 0846 GMT on the report, but is still about a seventh of their last year's peak of 338 rupees.
The New Delhi-based firm said in the presentation it was looking to sell its office property in New Delhi and four hotel properties.
The office property is expected to be sold during the September quarter, while the four hotels would be sold in about six months, Unitech said, adding it had already raised 2.31 billion rupees from the sale of one hotel property.
The company also received 3.86 billion rupees it had advanced to its telecoms unit, Unitech Wireless, after the subsidiary sold a stake to Norway's Telenor in March, the developer said.
Property prices in India have fallen by about a half from their 2007 peak, analysts have said, hit by high interest rates, tight credit conditions and customers deferring purchases in an uncertain economic environment, after doubling over three years.
The company said it would launch 40 new projects over the next 12 months across all major cities, with a focus on low-cost housing to boost sales volume.
For commercial assets, it had shifted its strategy to pushing sales rather than lease, the company said.
"This should result in comfortable liquidity position in due course of time," Unitech said in the presentation.
Unitech, as well as its larger rival DLF had plans to raise money by listing their property trusts in Singapore, but had to defer plans due to the turmoil in equity markets.
Unitech founders have pledged shares equivalent to 49.5 percent of the company's equity, according to a filing to the stock exchange in February.