Unitech to demerge non-core businesses

Unitech Ltd, the second-largest real estate developer in the country, is looking to de-merge its non-core businesses in order to focus only on real estate, a source familiar with the development said.

The company’s non-realty businesses include construction, special economic zones (SEZs), power, telecom and hotels.

The company plans to unlock value through private equity investment or outright sale, the source said.  Details such as valuation or the interested companies could not be ascertained immediately and a Unitech spokesperson declined to comment.

The New Delhi-based developer has been trying to sell its telecom tower-making business, based near Nagpur in Maharashtra, for about Rs 700 crore as part of the de-merging plan. This arm initially operated through a tie-up with Hyundai.

Unitech acquired Hyundai’s stake some years back.
Unitech has also been planning to sell its non-core assets like hotels, commercial properties and land plots.

Funds raised through the de-merger and sale of non-core
assets could be used to reduce its debt, which stood at Rs 6,200 crore as of December.

The developer had hinted that it will pay back Rs 1,000-1,200 crore and refinance the balance as long-term debt. About Rs 2,300 crore of Unitech’s debt is to mature by March 2011 and the company may pay Rs 350 crore in the current fiscal.