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RCom to Raise Rs 5,000 cr by Selling Real Estate
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siliconindia
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Friday, July 4, 2014
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Bangalore : Reliance Communication (R Com) has commenced the method to monetize its real estate assets across the country by aiming to raise 5,000 crore through it. The company will use the proceeds to repay the debts which are almost Rs 34,000 crore even after the share of recent qualified institutional placements.
The RCom board committee already approved the sale of these assets and held meetings with top real estate consultants namely CB Richard Ellis, Jones Lang Lasalle and Knight Frank for finding buyers of 10 properties. These properties are to be sold within 6-12 months.
The Delhi office in a prime central district near Connaught about 3.7 acre is also included in these 10 properties which are expected to gain Rs 700 crore. The other remained properties are namely Kolkata's Chowringhee Road (appraised at Rs 150 crore), Navi Mumbai's seven Towers of 388,000 square feet area (appraised at Rs 200 crore), land of 19 acres in Bangalore, Residential property of Navi Mumbai's posh seawoods about 150 flats (appraised at Rs 300 crore), Properties in Ambattur near Chennai, a property of 226,000 square feet in the Hyderabad Hi Tech City and Properties in Gujarat's Anjar and Tirupati. The complete evaluation of those properties is over 70 acres of land and 1.3 million square feet of area based on the presentation made to the real estate companies. These results to Rs 2,000 crore.
Additionally, RCom is tying up with few Real estate developers too for setting up Residential and commercial spaces beside IT parks, Dhirubhai Ambani Knowledge center (DAKC) which is at Mumbai outskirts. The company had an approval to develop 11 million square feet of space, which it has already built about 2 million sq.ft in DAKC.
The company will develop 4.5 million square feet under the 1st phase of this new project. Due to real estate consultants expectations the raise will undertake over Rs 3,000 crore. Last week, company has risen over Rs 4,808 crore through a QIP. With the raise in selling real estate, company is lowering its debt to below Rs 30,000 crore which will help to save up to Rs 1,300 crore of interest per year. The deal with real estate is a company's strategy to diminish its debt and interest rates about Rs 40,000 crore to Rs 34,000 crore.
The RCom is also planning to sell its DTF (Direct to home) business at Rs 2,000 crore and submarine cable business of Global Cloud exchange around Rs 5,000 crore which was earlier called as Globalcom. To reduce the debt burden, DLF sold its land in Mumbai worli to Lodhas at Rs 2,200 crore. RCom is not only involved in raising funds through real estate monetization. By keeping it company is Glaxo, It is looking to sell its 60 acres of land in Thane around Rs 1,600 crore to Rs 1,800 crore.
When multinational Bayer sold its land to Kalpa Taru which was in Thane for Rs 1,200 crore. By the same time carmaker Premier sold its Mumbai kalyan land to Runwai Builders for Real estate development. In most of the deals the buyers are the Real estate companies which are ready to pay the large amount and given that the area is limited around the city.
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