Lodha Developers International repays dollar bonds worth Rs 2,550 cr

Lodha Developers International Limited on March 12 said that it has repaid Rs 2,550 crore towards redemption of its March 2020 US dollar bonds, along with accrued interest.

The company had to refinance its $324 million (Rs 2,404.4 crore) debt maturing on March 13.

Last week, the company raised $200 million (approximately Rs 1,470 crore) in Senior Secured Notes due 2023 last week, which was managed by JP Morgan, UBS and CLSA. On Monday, the size of the new bond was further increased by $25 million (approximately Rs 180 crore) due to the increased demand from investors, it said.

"We were always confident of being able to meet our $325 million bond repayment obligations and have completed all requirements and payments for the bond to be repaid in full along with accrued interest. Despite the economic slowdown in India which has been further compounded by factors like Coronavirus and the oil price shock, we are pleased that we have successfully completed this obligation,” said Abhishek Lodha, MD & CEO, Macrotech Developers Limited.

Last month, realty firm Lodha group's UK subsidiary had raised over $200 million by issuing bonds in Singapore market to refinance part of its outstanding debt, sources said. The issue opened on February 27.

Lodha Developers International, a subsidiary of Mumbai-based Lodha Developers (which has been renamed as Macrotech Developers), had proposed to offer $225 million (around Rs 1,611 crore) aggregate principal of senior secured notes maturing in 2023.

Moody's analysis on Macrotech Developers Limited on March 4 had said that the proposed bond, which would partially settle the March 13 US dollar bond maturity, remains uncertain and subject to condition precent. It had said that the completion of the proposed bond will address immediate refinancing risk but the credit quality will remain weak.

To proceed with its proposed bond transaction, Macrotech Developers Limited  must first raise $118 million and deposit the funds in an escrow account. This is a condition precedent for the issuance of the proposed bonds. Funds in the escrow account ($118 million) together with expected proceeds of $225 million from the proposed bond will be used to repay the principal ($324 million) and the interest ($19 million) on MDL's existing backed senior unsecured bonds maturing on March 13, 2020, Moody’s Investors Service had said.

"The new bond from Lodha Developers International Ltd will be key for it to refinance its existing $324 million note maturing March 13. The company also needs to meet conditions involving setting aside cash before it can tap the proceeds of the bond. Lodha may fend off its near-term debt maturity, but refinancing risks remain high," said Moody’s Investors Service.

Selling the new note is key because Macrotech has no alternate financing arrangements, and if the new issue were derailed or if Lodha were to fail to meet the conditions, it would likely slip into a default, Moody’s said. Some of those conditions were unmet as of February 28, Moody's had said.

Lodha group had made a foray into the London market in 2013 with the acquisition of the landmark MacDonald House at 1 Grosvenor Square in prime Central London for over GBP 300 million (Rs 3,100 crore).

Macrotech Developers is India's largest residential real estate developer by sales and construction area.

The company has clocked net new sales of over Rs 7,000 crore in 2018-19 with collections of over Rs 9,000 crore. It delivered over 10,000 offices and homes in FY 18-19.

In the first nine months of 2019-20 fiscal year, sales have reached around Rs 5,000 crore, up 15 per cent from the corresponding period of the previous year.