Sobha Developers Ltd plans to cut debt by the end of FY11, banking on cash inflows and monetisation of land sales, a top official said on Tuesday.
"We used to have a debt equity (ratio) of 2:1 earlier. This has been brought down to 0.85:1, going forward it will be further brought down to 0.5:1, before the end of next financial year (FY11)," Managing Director J.C. Sharma told Reuters Trading India chatroom. Sobha Developers has around 3,000 acres of land spread across 10 cities, of which Bangalore accounts for about 31 percent of the total land bank.
The company expects to monetise around 1-1.5 billion rupees from sales of land, he said, but did not provide the location of land which the company intends to sell. It had received 540 million rupees from sale of land in the quarter ended Dec. 2009.
Sobha is also confident of selling 2-million square feet of space in FY10, he said. It has sold 166 units till date out of a total 310 apartments at the recently launched Sobha Garrison, a luxury residential complex for army personnel, in Bangalore. He said there is a revival in the realty industry, even though it would take another two-three quarters for it to come back to normal situation. There could be also some price corrections by the end of the year in "some pockets", like "Mumbai market, where office space costs more than in Manhattan", Sharma added.
The company is also planing to launch about 8 million square feet of space in the next 12-15 months time across four cities, Bangalore, Pune, Coimbatore and a new location in Chennai. Sobha has currently 5.6 million square feet of contracts on hand, he said.
(Reporting by Rajesh Kurup; Editing by Prem Udayabhanu). Source: Yahoo News
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