Unitech may dilute 26-40% to raise funds by FY09 end

Reports suggest that Unitech is looking at diluting 26-40% of its stake t o raise capital and is seeking conversion price of Rs 60-65 per share. The company has to pay around Rs 2500 crore by the end of this fiscal and is thus looking to raise money. UBS is advising Unitech in the endeavour to raise USD 800 million, reports quoting sources. New York-based BH Advisors has expressed interest in the Unitech stock and is considering picking up stake in Unitech. However investors want the conversion price of only at Rs 30-35 per share. If the deal goes through it’s going to be a very structured and complicated deal involving structured equity-linked instruments. Unitech has received legal opinion as for any deal to take place it has to FDI compliant. The deal is at the negotiation stage and a clutch of investors are interested in Unitech. Unitech has a promoter based real estate international fund USD 300 million dollar fund and the company plans to draw USD 110 million from this fund to invest in these residential projects.