Slide 1: Unitech: On the Path to Recovery
Unitech On the Path to Recovery
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: • This document has been prepared for information purposes only and is not an offer or invitation or recommendation to buy or sell any secur
Slide 3: Macro-economic Environment (Oct'08 – Feb'09)
Macro-economic Environment (Oct’08 – Feb’09) • Fall out of global financial crisis - Growth rates – Global scenario 2006-07 2007-08 2008-09 1Q08 2Q08 3Q08 • Tight liquidity, Euro area 2.6% 1.2% -0.5% 2.1% 1.4% 0.6% • Risk aversion, and Japan 2.1% 0.5% -0.2% 1.4% 0.7% -0.5% UK 3.0% 0.8% -1.3% 2.4% 1.
Slide 4: Financial Crisis: Impact on Indian Real Estate
Financial Crisis : Impact on Indian Real Estate • High growth in industry prior to downturn • Sharp reduction in demand led many developers to expand aggressively by resorting to high debt for Housing • Developers resorted to mutual fund • Delay in payments by existing borrowings because of customer
Slide 5: Impact on Unitech
Impact on Unitech1 • Receivables increased Sundry Debtors 1,345 1,500 substantially 1,000 746 Rs. Cr 500 • Sales dipped to an all time low 146 - Mar'07 Mar'08 Dec'08 • High leverage - Approx. Rs. Past Sales - Indexed 10,000 crores of debt (as on 8.0 6.8 Sep 30, 2008) 6.0 Index 4.0 3.0 2.6 2.0 1.0 •
Slide 6: Timely Intervention by Govt / RBI: Booster for Realty in India
Timely Intervention by Govt / RBI : Booster for Realty in India • Stimulus packages by Central Govt., coupled with RBI’s monetary policy interventions, have had a positive impact on the real estate sector in India • Lower interest rates helped to revive demand for housing in India • RBI allowed bank
Slide 7: Timely Intervention by Govt / RBI: Booster for Realty in India (contd…)
Timely Intervention by Govt / RBI : Booster for Realty in India (contd…) Movement in Key Policy Rates in India • Revision of key policy rates in India by the Government / RBI is expected to boost 10% demand in the Indian realty sector 8% • Special interest rates offered by PSU 5% banks for home loan
Slide 8: Unitech: Four-pronged Strategy
Unitech: Four-pronged Strategy I- Improve operational cash flows: By changing the mindset from maximization of realizations to maximization of volumes II- Reduced the capital intensity of business: By shifting the strategy from “Land banking to banking on land” III- Monetization of non-core assets:
Slide 9: Strategy I: Improving Operational Cash Flows
Strategy I: Improving Operational Cash Flows • Focus on affordable housing: Through a combination of reduction in costs, decrease in unit sizes and reduction in margins, Unitech has been able to offer housing at prices affordable to a wider cross section of customers • Taking a cue from differential
Slide 10: Uniworld Gardens II – Overwhelming Response
Uniworld Gardens II – Overwhelming Response 1st Ad released on 27-Mar-09 2nd Ad released on 3-Apr-09 3rd Ad released on 10-Apr-09 #Bookings till 27-Mar-09: 298 #Bookings till 3-Apr-09: 406 #Bookings till 10-Apr-09: 506 10
Slide 11: Launch of Ananda, North Town: Marks Unitech's entry into Chennai
Launch of Ananda, North Town: Marks Unitech’s entry into Chennai •70 Acre Project located in the heart of North Chennai •Will house 4,000 families when fully developed •Apartments starting at Rs. 19 lacs
Slide 12: New Project Launches (FY 2010)
New Project Launches (FY 2010) Proposed New Projects for FY10 • Proposed Launch Plan for FY10 – Total Area – 30 Mn. Sqft. 20 16.2 30 Area (Mn Sq.ft.) 25 # of Projects 15 – Area as % of Land Bank - ~7% 24 10.7 20 10 15 – Project Mix: 90% Residential, 10% 6.6 10 5 2.7 Non-Residential 11 7 5 5 0 0 – No
Slide 13: Strategy II: Reducing Capital Intensity of Business
Strategy II: Reducing Capital Intensity of Business • Unitech has a large, low cost and well diversified land bank, which is sufficient to meet its development plans for the next seven-eight years. As a result, Unitech has no plans to acquire further land in the near future except for extremely attr
Slide 14: Strategy III: Monetization of Non Core Assets
Strategy III : Monetization of Non Core Assets • Marriott Courtyard, Gurgaon: Hotel sold for Rs 231 crores. Transactions • Repayment of loan by the companies comprising Unitech Wireless to Completed Unitech Ltd: Rs. 386 crores • Saket Office is expected to be sold in the next quarter Advance • Kochi
Slide 15: Strategy IV: Debt Management
Strategy IV: Debt Management • Company has been proactively working with all its lenders to – Reschedule loans with near term maturities – Keep the cost of debt under control – Collateralize unsecured loans wherever necessary – Replace short term loans with long term ones 15
Slide 16: De-leveraging to Continue..
De-leveraging to Continue.. Our four pronged approach has started giving positive results! This should result in comfortable liquidity position in due course of time. Current debt of company however, is still high at Rs. 8,400 crores. De-leveraging will remain a focus area to reduce the interest exp
Slide 17: Unitech Wireless: Impact on Unitech Ltd
Unitech Wireless: Impact on Unitech Ltd Balance • Debt and Guarantees totaling Rs. 2,100 Cr on Unitech’s Sheet Balance Sheet transferred to Unitech Wireless • Improved sales due to focus on volumes • Unitech received approx. Rs. 386 Cr towards repayment of loan by the companies comprising Unitech Wi
Slide 18: Thank You
Thank You unitech’