NW18: Unitech official says Lehman in talks to invest more in projects

[K.Karthik Raja]

Unitech official says Lehman in talks to invest more in projects
Monday, Jun 16

MUMBAI - Lehman Brothers Real Estate Partners is in talks with
Unitech Ltd. for further investment in its Mumbai projects, and the
$175 mln (7.40 bln rupees) pledged for the Santacruz project in north
Mumbai is just the first tranche, a company official told NewsWire18.
"Lehman and Unitech are looking at building a long-term
partnership and the $175 mln investment is only part of it," the
official said.
Unitech's total land bank in Mumbai is around 350 acres and the
company is planning to take most of its Mumbai projects to the
development stage in the next two years, the official said.
Lehman may also consider investments into the company's national
portfolio, the official said.
The company today announced Lehman's decision to invest $175 mln
for 50% stake in the initial phase of project in Santacruz, being
jointly developed by Unitech and its partner Rohan Group.
The initial phase involves development of 1 mln sq ft office space
of the total developable area of 18 mln sq ft.
The first phase of 1 mln sq ft is likely to be completed in the
next
two-and-a-half years, the official said.
The project entails mixed-use development, including office,
retail,
residential, and hotels on the 97-acre plot.
Lehman Brothers and the joint venture between Unitech and Rohan
Group will each contribute 50% of the project construction cost.
The total cost of the project has been estimated at 20 bln rupees.
But
this is only half the money required for the massive
commercial-cum-residential development.
Unitech had invested 5 bln rupees for a 50% stake in this venture,
while Rohan Group holds 50% stake by virtue of owning the land.
The injection of funds are seen as a relief to Unitech, which has
held
back its $1 bln qualified institutional placement and listing of $700
mln
Singapore Real Estate Investment Trust due to poor market sentiment.
The news of receiving funding from Lehman Brothers pushed up
shares of Unitech
to 194.25 rupees on the National Stock Exchange, up 3.6% from close
Friday. End