Emaar MGF to use over half of Rs 3,850 cr IPO to repay debt

NEW DELHI: Realty firm Emaar MGF, which plans to raise Rs 3,850 crore through an initial public offer, will utilise over half of this fund to repay its debt alone to strengthen its balance sheet.

Emaar MGF, a joint venture between Dubai-based Emaar Properties and domestic firm MGF, has a debt of Rs 5,807.79 crore as on August 31 and plans to utilise Rs 1,972.1 crore raised from the public in part repayment.

The repayment will also include the debt of special purpose vehicle (SPV) created by the company for developing the Commonwealth Games Villages -- Emaar MGF Construction.

The realty major had filed its draft prospectus with market regulator SEBI to raise Rs 3,850 crore through an IPO on September 29.

"In order to deleverage its balance sheet, the company intends to repay Rs 1,772.6 crore of its outstanding debt from the proceeds of the fresh issue," the Draft Red Herring Prospectus (DRHP) of the company said.

Some of the lenders to the company include Unit Trust of India Mutual, HDFC, L&T Infrastructure Finance Company, Axis Bank, LIC, Citibank, ABN Amro Bank, HSBC and SBI.

"The company proposes to utilise a part of the proceeds of the fresh issue to the extent of Rs 199.5 crore for funding Emaar MGF Construction (the SPV), which proposes to utilise for the repayment and prepayment of loan facilities availed by it," the DRHP of Emaar MGF said.