Parsvnath in talks with PE for stake sale in Sonepat plan

Real estate company, Parsvnath Developers is looking to offload stake in it's Parsvnath City project in Sonepat.

In an interview with CNBC-TV18, Pradeep Jain, chairman of Parsvnath Developers said that company is in talks with couple of private equity (PE) investors for selling stake in Sonepat project. It is also looking to offload stake in its Dharuhera project. Below is the verbatim transcript of Jain's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: There is some talks that you are likely to sell part stake again of your Sonipath project to some private equity firms, can you take us through what is going on there? A: Yes, we are in talks with couple of private equity investors for our housing project on NH1 at Sonepat a few kilometers away from Delhi border, as well as in Dharuhera,another housing project on NH8 towards South of Delhi. Q: What could potential valuations be of that project and what are you likely to do with cash that you get? A: It's too early to determine the valuation. We are raising cash only for project execution and the private equity investors will put the money for execution of that project. Q: For core NCR projects as well are you in discussion with any stake buyers? A: Both the projects are within the NCR. We are already enjoying couple of private equity investments. Out of our four- five projects, three large investors have already invested out of our Delhi and the NCR projects in Ghaziabad, Gurgaon and Delhi. Q: You had bid for the Rail Land Development Authority (RLDA) and that money will be due very soon, you will be able to pay up that Rs 300 crore plus? A: We had bidded for this property in the month of November for Rs 1,651 crore that 20% money need to be paid, that is about 330 crore. That Rs 330 crore is already paid to RLDA in the last week of March. Now, for next the 18 months there is no money to be paid to the government. The project is fully funded for next 18 months through our own equity and money invested by private equity investor, Red Fort Capital. Q: What would be your total net debt at the end of FY11 and what is the target to bring it down to by the end of FY12, the next fiscal? A: Our net debt situation currently, is around Rs 1,200 crores. We keep reducing this debt on month on month basis. For the current financial year, we expect substantial reduction in debt through internal accrual. We own one property in Connaught Place on KG Marg and that property is about to start. We are expecting the building plan release from local authority within next couple of weeks. The total area is about 140,000 square feet. There is an expected realization of about Rs 900-1,000 crore out of that project. Also Read CRISIL assigns fair value of Rs 63 to Parsvnath Developers