No money was paid to revoke pledged shares: HDIL

HDIL surged over 4 percent on the news of promoters revoking all pledged equity shares with IL&FS Trust Co. In June 2012, the promoter group had pledged 14.54 crore shares or 96 percent of the holding. IL&FS Trust has released 7.54 crore shares, comprising 51.89 percent of the total pledged shares.

In an interview to CNBC-TV18, Sarang Wadhawan, Vice-Chairman & Managing Director, HDIL, said the group had certain obligations towards IL&FS Trust, thus the shares were pledged, but now that has been removed and the guarantee has been given by promoters. He said no money transfer was involved while revoking the pledged shares. Wadhawan said the company is comfortable with its current 0.3x debt:equity ratio.

Below is the interview of Sarang Wadhawan's with Anuj Singhal and Reema Tendulkar on CNBC-TV18.Anuj: HDIL promoters have revoked all of the pledged equity shares, this has come as a quite a bit of surprise to the market because the general belief was that the money is the problem for Housing Development and Infrastructure (HDIL). Where would promoters have got the money to actually revoke all the pledged shares?A: The shares were pledged with a trust called Sara Trust which is a family owned trust. There were certain obligations which were towards IL&FS Trust where the shares were pledged. There was no money transfer as such and we have removed those obligations and the guarantee is given by the promoters and cleared the pledge of shares.

Reema: What's the amount that the promoters had to pay to revoke the pledge?A: As I said there was no money which was to be paid on this account.Reema: Have you swapped it with some other obligations?A: The guarantees which were given by the promoters have been revoked. There were certain guarantees which were given by the promoters for the obligations of HDIL as well and those guarantees are since being revoked. The shares were pledged for those guarantees and the obligations were on the promoters for the debts taken by HDIL as well. So now since those obligations are off the shares have been moved out.Anuj: What's the current debt on HDIL's books and going forward would you be working to pare that or are you comfortable with your debt situation?A: We are pretty comfortable with it, we are on 0.3 debt to equity; we are currently at about Rs 2900 crore on a stand alone basis and on consolidative basis we are at Rs 3400 crore. We are pretty comfortable with it. We do want to reduce debt further and over this year, as given guidance earlier we will be reducing it by around 20 percent. So we will see as we go around.