HCC sticks to Lavasa IPO plans, says DRHP in 1-2 weeks

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In an interview with CNBC-TV18, Praveen Sood, CFO of Hindustan Construction Company (HCC) said the company has environment clearance for the first two towns of its flagship real estate project, Lavasa. "We expect to complete them by 2012," he informed.

The company has also sought environment clearance for the next few towns it is planning to develop. Sood also reassured that the company will stick to its earlier announced IPO plans. "We will file for DRHP for Lavasa in 1-2 weeks," he said.

At 12:41 hrs the share was quoting at Rs 62.60, up Rs 1.15, or 1.87%. It was trading with volumes of 423,434 shares.  

Here is the verbatim transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: First can you just outline the situation as it stands for the Lavasa project because we understand that there are some environmental differences that exist on that project as well?

A: Before I deal with this question, let me reiterate the fact that we at HCC-the promoter of the Lavasa project-are very proud of this project. We believe that we are putting up a benchmark city into the horizon of India and all the futures cities in India would aspire like Lavasa in the future. At HCC we are a responsible company and we are for the existence for the last of 85 years and done a marvelous project-Bandra Sea Link, which is a one-of-the-kind of project.

Lavasa is the development of five towns and which will take shape from 2008 to 2020. The first two towns Dasve and Mugaon will be over by about 2013. Dasve is almost nearing completion by the end of this year and Mugaon will start development afterwards. We have the environmental clearances from the State Government for the first two towns close to about 2000 hectares or 4,900 acres. Technically speaking, we do not need any environmental clearances till 2013 for the development, sale or anything concerning Lavasa.

For the second phase, which is the balance three villages or towns, we have sort environmental clearances about a year back and our request is under consideration and we are very sure that looking at the development we have done, looking at the environmental friendly steps which we have taken, Lavasa looks more cleaner as compared to when we took over Lavasa-I am very sure that we get all the clearances on account of environment maybe in the next six to eight months time.

Q: The State government apparently has been on record saying that they are re-examining the lease because of the environmental concerns that has been highlighted by the Union Environment Ministry. Have you had any intimation from them on that front because having obtained clearance already does not guarantee you the fact that you can go ahead with the construction or the project as we found out in Orissa where one grant was received, approval was in place, but that project too has been stayed?

A: This is not the case. In this case this is not concerning the mining. It is basically environmental clearance and State government in its own full right because we have as per the government norm that we have any place which is less than 1,000 meter less than the sea level does not need the central environmental clearances. So state in the full right has given clearances.

So far we have not received any intimation or any kind of letter from state government that they are re-examining our environmental clearance. Looking at the efforts that we have made to keep the environment-keep the water, keep everything around us in a proper shape or rather enhancing it-I am very sure that state government will not take such a step and we would be carrying on with the construction as well as the development in the regular course.

Q: Have you reached out either to the Union Environmental Ministry or to the State government over the last few weeks now that this has been widely reported? Have you got any kind of clarification from either of these bodies?

A: To be honest this is all you are talking is appearing in the media and we are not received any kind of letter either from Union government or the State government and I believe the paper reports are stating all the time that Union government has asked something from the State government to which they have replied.

Q: But are you still awaiting a final go-ahead or a final okay from the Environmental Ministry and now soon may that happen?

A: We are not waiting. We have every clearance for the first phase of the plans which basically consist of two villages-Dasve & Mugaon. We are continuing with our construction as well as development of these two towns. As I told you till 2012 or till the completion of these two towns we don't need any further environmental clearances and that is it.

We are continuing with our plan-sales and everything we are continuing with the same tempo. We are not changing it.

Q: Are you going ahead with the fund raising plans as well for Lavasa when is that scheduled for?

A: Environmental clearance has nothing to do with our fund raising plan. We are continuing with the plan and we are sticking to our original plan. Most probably, we should be filing the DRHP in the next 1 or 2 weeks.

Q: By how soon do you will be hitting the market?

A: As I told you all these environmental controversies, which is being raised, all these allegations, which have been made on Lavasa in the last few weeks-they are not deterring us from going with any of our plans. We are going ahead with all our plans-be it sales or fund raising, or the development.