DELHI: UnitechBSE 3.12 % has sold two plots of land in Mysore and one in Bangalore with a total area of 11 acres for more than 130 crore, a senior executive at India's fourth biggest real estate firm said. Part of the proceeds will be used for paying an overdue installment of a 200-crore loan taken from Life Insurance Corporation of India, he said, asking not to be named.
LIC issued a notice to Unitech on Saturday for the notional possession of a part of the company's 350-acre land parcel on the Noida-Greater Noida Expressway after the developer failed to repay around 80 crore of the loan.
The state-owned insurance group had issued a demand notice to the developer at the end of November last year, asking its promoters to pay within 60 days the installment for the loan for which the Noida land was given as collateral.
The plots in Karnataka were bought by local developers, the executive said without naming them. Unitech did not respond to an email seeking comment.
The developer has more than 6,200 crore of net debt and it has been in the process of selling several assets to bring it down. The company has put two of its hotels - the 200-room Country Inn and Suites in Gurgaon and the under-construction 250-room Marriott in Noida - on the block.
It is also in the process of selling a 3.6-million-square-foot IT special economic zone in Gurgaon, which is part of its Unitech Corporate Park portfolio. The developer has a 40% stake in the SEZ. US-based private equity company Blackstone and Singapore's state fund GIC are in the fray to buy the property for around 2,600 crore.
These deals will likely provide some relief to Unitech financially in the aftermath of its failed telecom joint venture with Norwegian firm Telenor and help it focus on its core business of real estate development.
Like most companies in the real-estate space sector, Unitech's performance, too, has had to bear the brunt of slow sales and rising costs in the past few quarters.
This was reflected in a 61% drop in its consolidated net profit for the quarter ended on December 31, 2013 at 32.82 crore. Net sales, however, were up 13% in the quarter at 731.67 crore.
In 2009, the Gurgaon-based company sold its 200-room Courtyard by Marriott hotel in Gurgaon to investor Roop Madan for 231 crore. It also sold an office building in Saket in Delhi to an investor for 450 crore in the same year to reduce debt, which had crossed 10,000 crore around that time.