..........amidst a spew of litigation against Unitech Ltd, stood a company that was a shadow of its former self. From the wrong choice of domain or its misadventure into the telecom sector, to absence of big launches, to slow pace of project construction coupled with a high debt servicing cost, to cash crunch, to customer complaints, to sentencing of the promoters by Courts, et all - -the company has gone through all....
At the time of announcement of results, Sanjay Chandra, Managing Director of Unitech said that the company's focus has been primarily on completing the ongoing projects and delivering the finished product to its customers. Balance expected receipts from these ongoing projects combined are sufficient not only to meet the remaining construction expenses but also to service the debt, if any, against these projects. The company has been taking various measures, such as creation of project specific escrow accounts, to boost customer confidence and improve conditions so as to generate liquidity needed for completing the ongoing projects. Apart from improving collections, company is also mobilising funds from banks and financial institutions. With these measures company is hopeful of completing the ongoing projects in the next few quarters in a phased manner, he added.
Apart from this, there were recent media inputs that the capital market regulator SEBI is likely to consider proposals for relaxed norms for REITs. Among the changes, the regulator’s board is looking to examine a proposal to make Real Estate Investment Trusts (REITs) more attractive to investors by allowing them to invest a large portion of funds in under-construction assets, sources said.
Regarding REITs, SEBI plans to remove the restriction on the SPV (Special Purpose Vehicle) to invest in other SPVs holding the assets, which in turn would allow REITs to invest in a holding company owning stake in SPVs.
The Economic Times, wrote on 9 June, 2016:
There are reports that the authorities in Greater Noida may soon implement an exit policy to allow builders to surrender surplus land. Authorities of Noida, Greater Noida and Yamuna Expressway will soon firm up a proposal on this and send it to the Uttar Pradesh government for approval, said Arun Vir Singh, CEO of Yamuna Expressway Industrial Development Authority (YEIDA), an ETRealty.com report said.But one should remember that raising money, in part, requires a reasonably solid reputation, and unfortunately for Unitech Ltd, the ghost of telecom will continue to haunt it for a couple of quarters. So, it remains to be seen how much the company is able to rake in fresh capital through Qualified Institutional placements.
However, Unitech Ltd has recently raised Rs.85 crore from Piramal Group and is in talks with two private equity players to raise more funds for the development of a land parcel in Noida and to repay the LIC loan.