Unitech drops $700m convertible bonds

Unitech, the second-largest real estate developer in the country, has withdrawn its application to the Foreign Investment Promotion Board (FIPB) for approval to raise $700 million through foreign currency convertible bonds (FCCBs).

The company withdrew the application on Monday just hours before the FIPB meeting where the matter was to be taken up.

The New-Delhi-based developer was keen to raise funds through FCCBs with an eye on the low coupon rates going in the international market, which would have given it cheaper funds.

As per the plan, the FCCBs would have been converted into equity depending on the agreement with the investors.

No clear reason was forthcoming on the withdrawal of the application.

Unitech MD Sanjay Chandra had earlier said it did not need to raise funds in the immediate future.

The Reserve Bank of India had recently objected to the developer’s request to be exempted from the three-year lock-in clause for investments made through FCCBs.