Real estate major Lodha group raises USD 125 mn to repay debt

Leading real estate firm Lodha group has raised an additional USD 125 million through bonds to pre-pay its costlier debt and reduce interest expense.

Mumbai-based Lodha group’s subsidiary Lodha Developers International Ltd had raised USD 200 million in March 2015 through issue of bonds with maturity in 2020.

The company has now raised an incremental USD 125 million through issue of bonds with same maturity date, taking the total size to USD 325 million.

“Lodha Developers International has priced a USD 125 million tap of it’s 2020 bonds at a yield of 8.89 per cent, a 310 basis points (3.1 per cent) reduction in yield from the original issue which was done at a yield of 12 per cent,” Lodha group said in a statement.

The tap issue has been done at a price of 106.25, at a premium to the original issuance. The bonds are listed on the Singapore Stock Exchange (SGX).

Lodha International, which is based in Mauritius and undertakes development of projects in London market, said that the company planned to raise USD 100 million but the size of the issue was raised on strong interest from global investors.

“The total order book, at final pricing was in excess of USD 320 million. On account of this strong interest, the deal was upsized to USD 125 million,” the statement said.

Lodha group said the proceeds would be used to pre-pay its higher cost debt and is leverage neutral for the group.

In July, Lodha Group MD Abhishek Lodha had said that its Indian debt stood at Rs 14,500 crore, while the debt of London business was about 300 million pounds.

Privately-held Lodha Group is currently developing around 41 million sq ft area and has 31 ongoing projects in London, Mumbai Metropolitan Region, Pune, Bengaluru and Hyderabad. It has a land bank of 350 million sq ft for future development.

The group had forayed into the London realty market in 2013 and acquired two prime sites in central London for an investment of about 400 million pounds.

In London, the ‘Lincoln Square’ project was launched last year and the second project ‘No 1 Grosvenor Square’, located in the heart of Mayfair, was launched in June this year.

Lodha UK is eyeing a sales revenue of 1.5 billion pounds (over Rs 12,000 crore) in the next three years from two ongoing housing projects in central London.