Share allotment to CDR lenders will not reduce loan: Unity Infra

Unity Infraprojects Board, on Thursday, approved allotment of 39 lakh shares to CDR investors at a price of Rs 27.5 per share. Speaking to CNBC-TV18, Madhav Nadkarni, CFO of Unity IndraProjects said that the interest on funded interest term loan (FITL) is been converted into equities. Earlier, the company had issued 1.19 crore shares to corporate debt restructuring (CDR) lenders. Post this, the promoters shareholding stands at 62 percent, he said. Nandkarni further added that the company will have another allotment of 38-39 lakh shares in the March quarter, which will lower down promoter shareholding to 59 percent and bank’s stake will be around 16-17 percent. This is expected to be the final installment, he said. However, he said that loan of the company will not reduce as the interest on FITL has been converted into equities instead of cash outflows. There will no drop in interest cost, he added. On the company’s business, Nandkarni said new projects are coming in road segment. However, he added that there are challenges in getting new orders due to reluctance on part of some government clients. The current order book of the company stands at Rs 2,300 crore.Below is the verbatim transcript of Madhav Nadkarni's interview with Reema Tendulkar & Nigel D'Souza on CNBC-TV18.Reema: The company has been in corporate debt restructurings (CDRs) since January of 2015 and you have been making various allotments to the CDR lenders. Could you give us an update on what has been the total allotment and what the progress has been?A: Interest on FY10 is being converted into equity and till now earlier 1,19,00,000 (one crore nineteen lakh) shares and yesterday 39,20,000 (thrity nine lakh twenty thousand) croe shares -- so on an average one crore fifteen lakh (1,15,00,000) shares has been converged. Now banks after yesterday's allotment will be holding 13.65 percent in overall equity and promoters' equity contribution would be 62.62 percent.Reema: How many more to go?A: In March quarter, approximately 38-39 lakhs will go. Then promoters would be around 59 percent and banks approximately would be around 16-17 percent.Nigel: You are talking about a lot of conversion, promoter stake will come down to about 59 percent as you told us, currently on a quarterly basis or on a financial year basis, close to around Rs 290 crore is what your interest payment was. Post this conversion, what can it come down to and also could you give us what is the update on the debt?A: This is just a conversion of shares -- interest on FY10 is being converted into share. Instead of making cash outflow for interest payment, it is converted into share. So loan will not come down, so there would not be any drop in interest cost.For full interview, watch accompanying video...