Chennai 27, December: Unitech, one of India’s largest real estate developer, is making an aggressive entry into the booming realty market in south. It is on the verge of announcing two joint development deals, involving over 1,400 acres of prime land in Hyderabad and Chennai.
Unitech is set to shortly unveil its 50:50 joint venture deal with serial entrepreneur Prasad V Potluri’s PVP Enterprises which owns around 1,300 acres in Hyderabad’s Shamshadabad region, the most happening part of the city in terms of property development.
Unitech will also unveil, over the next few days, a 55:45 joint venture deal for developing 8.8 million sq ft of residential property on the 70-acre Binny land near Perambur in north Chennai, owned by SSI, sources privy to the development told ET.
In February this year, PVP Enterprises picked up a controlling stake in SSI. It now owns 62% equity stake in SSI, which include acquisition of 42% equity stake held by the Kalpathi brothers - Aghoram, Ganesh and Suresh, as well as 20% acquired from the public through an open offer in October.
PVP Enterprises pumped in Rs 750-800 crore for the stake. Kalpathis still hold 29% stake in SSI, the rest 9% with QIBs and others. Besides the 70 acre Binny property, SSI also owns prime property, including an IT Park, developed over 100 grounds (one ground = 2,400 sq ft), at Vadapalani in West Chennai, as well as the Dasaprakash Hotel property in Ooty.
Also, SSI and PVP Enterprise are expected to merge. A formal announcement is likely to take place over the next couple of days, even as the merger ratio between the two companies too has been tentatively finalised. “For every three shares of SSI, one share of PVP Enterprise will be allotted. While the process for merger has been set in motion, it is still not clear whether SSI will undergo a name change,” sources privy to the deal said.
Despite repeated attempts, Shyam Chandra, joint managing director, Unitech, Kalpathis of SSI and its new promoter, Prasad V Potluri could be reached for their comments. According to sources, all existing loans of PVP Enterprise are being converted into equity. This will make it a debt-free company, after the merger. The move will result in a huge scaleable opportunity on the infrastructure front for the merged entity that will also be cash rich.
The development on the Binny land alone involves construction of over 5,000 residential flats, besides retail and commercial space. Even at a reasonably price level of Rs 5,000 per sq ft, the sale proceeds of developing 8.8 million sq ft comes to around Rs 4,400 crore.
“The environment clearance has been obtained for the project, while the CMDA clearance for the first phase involving development of one million sq ft has also been received by SSI,” the sources said.