Housing Development and Infrastructure to sell commercial complex in Mumbai Suburb to cut debt

MUMBAI: Realty developer Housing Development and Infrastructure ( HDIL) has put its nearly 1 million square feet commercial complex at Kurla in Mumbai on the block as it seeks to reduce debt, two people familiar with the development said.

HDIL is looking to raise over Rs 500 crore through the sale of this under-construction property called Premier Commercial. “The developer is currently in talks with two entities including a private equity fund, that has already started due diligence for the property ,“ said one of the people quoted earlier.

“The transaction is expected to be completed in the next 45 days.“

HDIL has already completed around 70% of the project for which construction had started in late 2010. It was earlier considering converting the commercial project with large floor plate area of 2 lakh sq ft into a residential project.

But it has now shelved the plan and decided to completely offload the project to support its debt-reduction strategy.

“We are looking at reduction of debt by Rs 700-800 crore this financial year and various options are being considered for this," said Hari Prakash Pandey, vice-president ( finance) at HDIL.

He, however, declined to comment on the ongoing process of selling the commercial project in Kurla.

HDIL is planning to use the proceeds from this transaction to repay part of its debt. Recently , the developer sold its 45% stake in its subsidiary that owned a hotel property at Juhu in Mumbai for Rs 290 crore. The proceeds were used for repayment of debt.

As on March end, consolidated net debt stood at Rs 3,284.76 crore, while standalone debt was Rs 2,441 crore.

Of the total debt, around 70% is with long-term maturities after four years. The company reduced its debt by around Rs 600 crore in the year-ended March.
As part of its debt-reduction strategy , it is also looking at selling its nearly 100-acre land parcel in Hyderabad. Shares of HDIL slipped 1.3% to close at Rs 101.15 on BSE on Wednesday.