On sale: Unitech puts hotels, land on block for Rs 1,000 crore

Shares of Unitech today ended 4.83 percent higher after CNBC-TV18 reported the realty major has put two hotels as well as well as three land parcels spread across Bangalore, Chennai and Mysore on the block.

Unitech hopes to conclude the asset sale worth Rs 1,000 crore by the end of the current quarter.

Sources told CNBC-TV18the real estate major has put a 250-room hotel in Noida on sale for Rs 375 crore while it is looking to garner Rs 250 crore from a 200-room hotel in Gurgaon.

According to the report, high net worth individuals are in talks with the company for the two hotels.

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The company also plans to sell 30 acres of land spread across Bangalore, Chennai and Mysore for a combined value of Rs 400 crore.

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The asset sale programme is likely to improve the realty major's liquidity position.

Already the company's slow execution of past projects and liquidity problems are hampering its ability to launch new projects.

In September 2013 Unitech was directed by a UK High Court to repay a $150 million loan it took from Deutsche Bank in 2007. Deutsche Bank had sued Unitech in the British court in 2012 for not repaying its loan and also sought an additional $11 million as part of an interest rate swap contract.

In December 2013, the company has received a default notice from LIC Housing Finance on a loan taken in 2007 for a luxury housing project in Noida. As per media reports, LIC Housing Finance issued a notice to the company barring it from selling the Noida Sector 96 land, which has been pledged as collateral against the loan.

Unitech had taken the loan in 2007 from LIC Housing Finance in 2007. The loan portfolio was later shifted to parent LIC. According to a CNBC Awaaz report,LIC had made it clear that the land cannot be sold unless Unitech repays the loan. The loan was restructured twice, but the company has still been behind on interest payments even under the revised schedule. Two of the company's cheques to LIC recently have bounced, and LIC has filed a case for the bounced cheques.