Bangalore: Banks and financial institutions, which lent close to Rs 1,900 crore to Sobha Developers Ltd, have agreed to reschedule part of the debt.
Sobha Developers' managing director J C Shama said, "The company has managed to reschedule a substantial part of its loan portfolio." However, he did not elaborate. "Almost all the financial institutions have realigned our loans and our target is to bring down the debt to equity ratio of 0.5 by this fiscal from the current 0.85," he added. Of the total debt of Rs 1,900 crore, the Bangalore-based real estate developer will be able to repay Rs 1,130 crore on easier timelines.
Sobha has also refinanced/ rescheduled its near-term debt to match expected cash flows. The realty major is currently paying an average rate of interest of around 13% and has an annual interest outgo of Rs 240 crore and fixed overheads of Rs 60 crore. Sharma said, "We are looking at operational improvement and plans to bring down the debt through land monetisation, QIP and private equity deals."
Instead of paying Rs 960 crore and Rs 460 crore in FY10 and FY11, respectively, as per the rescheduled timeline, Sobha will pay an easier Rs 450 crore and Rs 690 crore in the period, the analyst said.
The company is looking to mop up between Rs 1,200 - Rs 1,400 crore by selling its land parcels at a premium. These parcels, totalling up to 475 acres, were valued at between Rs 600 and Rs 800 crore sometime back, according to market sources. However, Sharma refused to give any details .
Sobha recently raised around Rs 530 crore by diluting close to 22.5% equity through a qualified institutional placement (QIP). It intends to use Rs 410 crore of the QIP proceeds to reduce part of the debt.
Thursday, August 6, 2009
Sobha profit dips to Rs 13 cr in Q1
BANGALORE: Realty major Sobha Developers has seen its net profit nosedive for the first quarter ended June 30, 2009, at Rs 12.7 crore, against Rs. 50.5 crore for the same period in FY09. Income from operations stood at Rs 177.1 crore (Rs 346.8 crore).
Sobha, which bore the aftershocks of the global economic slowdown, has seen a revival in fortunes in the first quarter compared with the fourth quarter ended March 31, 2009. Net profit in the first quarter increased 76.4% to Rs 12.7 crore from the fourth quarter, while total income was sequentially up 15.6% at Rs 178.6 crore.
“The real estate industry has seen clear signals of revival in demand during the first quarter. With the Indian economy growing at 6-7% and expected to achieve a higher growth rate in the next couple of years, real estate infrastructure industries are poised to play a more significant role. It will be a domestic-driven industry, growing at a much faster pace,” a company filing made with the bourses added.
On its part, Sobha Developers has realigned debt, brought on board a private equity partner, besides successfully completing a qualified institutional placement (QIP) raising Rs 500 crore.
These steps, the filing goes on to say, have added the much-needed comfort in operations and have helped the company focus on progress in various projects across key cities, including Bangalore. The company intends to focus on debt reduction and cost optimisation and believes it is well-equipped to capitalise on the early revival in the Indian economy.
As of June 30, 2009, Sobha Developers has completed 50 residential / commercial in-house projects and 146 contractual projects covering 31.9 million sq ft of built-up space.
Sobha Developers has currently 31 residential / commercial ongoing projects totalling 9.2 million sq ft. The company has contractual projects in several states like Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana, the NCR, besides Maharashtra.
On the bourses, the Sobha scrip was down 1.2% at Rs 219, with 3.5 lakh shares changing hands on BSE.
Sobha, which bore the aftershocks of the global economic slowdown, has seen a revival in fortunes in the first quarter compared with the fourth quarter ended March 31, 2009. Net profit in the first quarter increased 76.4% to Rs 12.7 crore from the fourth quarter, while total income was sequentially up 15.6% at Rs 178.6 crore.
“The real estate industry has seen clear signals of revival in demand during the first quarter. With the Indian economy growing at 6-7% and expected to achieve a higher growth rate in the next couple of years, real estate infrastructure industries are poised to play a more significant role. It will be a domestic-driven industry, growing at a much faster pace,” a company filing made with the bourses added.
On its part, Sobha Developers has realigned debt, brought on board a private equity partner, besides successfully completing a qualified institutional placement (QIP) raising Rs 500 crore.
These steps, the filing goes on to say, have added the much-needed comfort in operations and have helped the company focus on progress in various projects across key cities, including Bangalore. The company intends to focus on debt reduction and cost optimisation and believes it is well-equipped to capitalise on the early revival in the Indian economy.
As of June 30, 2009, Sobha Developers has completed 50 residential / commercial in-house projects and 146 contractual projects covering 31.9 million sq ft of built-up space.
Sobha Developers has currently 31 residential / commercial ongoing projects totalling 9.2 million sq ft. The company has contractual projects in several states like Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana, the NCR, besides Maharashtra.
On the bourses, the Sobha scrip was down 1.2% at Rs 219, with 3.5 lakh shares changing hands on BSE.
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