4 Apr, 2012, 06.33AM IST, The writer has posted comments on this article Ravi Teja SharmaRavi Teja Sharma,ET Bureau

Unitech to exit telecom business, focus on real estate, says Ajay Chandra






NEW DELHI: Unitech will exit the telecom business and focus on its core business of real estate, Ajay Chandra, managing director of Unitech, said. Admitting that the decision to enter the business was a mistake, Chandra, said, "Telecom is not our core competency.
Our competence is real estate and we will stick to real estate." He added that the company will not bid for new telecom licences when they are given out later this year.
In the last two years, since the 2G scam broke out, the company's core business had taken a beating and dropping sales of homes and offices around the country haven't helped matters. Things are now starting to look up for the company, which is focusing on executing its projects and reducing debt.
NEW BEGINNING

In the last two years, since the 2G scam broke out, the company's core realty biz had taken a beating.

Unitech had invested $150 m in Uninor and will have to book losses if this investment is wiped off.

Company has managed to reduce its debt considerably, from a peak of Rs 10,900 cr in December 2008 to Rs 5,400 cr currently. "The negative news does not impact home sales for us but it cannot be quantified. Our sales are up, but they could have been up by a bigger percentage if this wasn't happening," said Chandra. He agrees, though, that the company has had to put in a lot more effort to sell because of the negativity.
The fortunes of the company are still linked to the outcome of its telecom case as it had invested to the tune of $150 million in Uninor, the Telenor and Unitech JV, and will have to book losses if this equity investment is wiped off, he said.
"Most of the damage that had to take place, has taken place. Licences have been cancelled by the Supreme Court so it can't get any worse," he said.
Now the focus of the company is solely on its real estate business and Chandra hopes the high interest rate regime changes soon, which would further improve real estate sales. "The beginning of this year has been good and we have seen strong sales in all segments and categories. Outside of Mumbai, sales are happening and prices have increased," he said.
The company has also managed to reduce its debt considerably, from a peak of Rs 10,900 crore in December 2008 to Rs 5,400 crore currently. In the last few months, it has also secured construction finance of about Rs 550 crore from two public sector banks. "Funding for construction is available and the last six months have been comfortable," said Chandra.
Unitech had decided to enter the telecom services sector in 2007 and had applied for licences for the whole country. In 2009, after it had secured the licences, Telenor bought stake in Unitech Wireless for Rs 6,100 crore and subsequently invested another Rs 8,000 crore in the business.
The two companies got into a dispute after the cancellation of 122 licences by the Supreme Court. After this verdict by the court, the Norwegian company sought compensation from the Indian firm for damages caused to its venture.
Unitech later moved the Company Law Board seeking approval to settle the ownership dispute through arbitration. Last week, the I-T department attached the shares of three companies through which Unitech Ltd holds about 33% stake in the JV with Telenor saying these companies had outstanding income tax dues of around Rs 701 crore.
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  • Hopefully there are better times ahead for Unitech Investors
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  • Originally Posted by manish2010
    Hopefully there are better times ahead for Unitech Investors


    manish bhai any news abt unihomes 3 ? why the price hike of 300 in it when the work has not even started there....
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  • Price hike is done to maintain the momentum of bookings & keep investors happy by all the builders there is rarely a solid reason for a price hike :)
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  • Originally Posted by manish2010
    Price hike is done to maintain the momentum of bookings & keep investors happy by all the builders there is rarely a solid reason for a price hike :)


    hmmm looks like Prithvi is the underwriter for this ... they are holding a carnival for unihomes soon.. free snacks, fun and games etc ! ;-)
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  • interesting headlines..i think they missed the word 'made' before to quit..

    lot ke buddhu ghar ko aaye..hope the idiot kid takes a lesson from this and focuses on what unitech does best..
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  • Unitech biggest fraud company to invest into....i am a buyer of unihomes 1 and they have stopped work for more than a year now after taking 85 % of money. BEWARE BEWARE BEWARE and spread the news to your near and dear
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  • Originally Posted by mehrotra_kk
    Unitech biggest fraud company to invest into....i am a buyer of unihomes 1 and they have stopped work for more than a year now after taking 85 % of money. BEWARE BEWARE BEWARE and spread the news to your near and dear




    Sir when did u book wth unihomes?

    if in july 2009 then pls don't expect any builder to give u before july 2013.

    This is true with every company. Name any project which has been handed overbefore 4 years.


    Exceptions are everywhere
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  • Mr Mehrotra you seem to be overly negative about Unitech & looks like ur expectations from builders is very high which is surelly not the case esp NCR builders. Problems are there with almost every alternate builder esp. in tough market conditions like we are having for past 3-4 years & unitech is no exception.

    Have you escalated ur concern to Senior most person in NOida office or contacted Ramesh Chandra in Gurgaon ?
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  • friends its not to do with delivery date the only thing i expect in business is to have value for words. let me tell everyone how their CRM (customer relationship manager) tells lies to us --

    in regular meetings he has assured us that work will start in unihomes after monsoon as the workers have gone to their villages. after monsoon it became dussehra 2011. after dushera it became diwali which was also ok . after diwali it became new year, after new year it became feb 2012 (this was 100% verbal commitment). All this was because workers were busy with their farming etc. Now when i go to the site i hardly see 30-40 workers that too working on new towers so that they can extract more money from buyes under CLP. when we call to Mr bhatt from the site he says there are 300 workers on site (white shameless lie offcourse).

    Best part comes now--

    a few days back we got letter from unitech that the work got delayed because of farmers protest. Looks like farmers have a special liking for unitech sector 117 site. all other builders a able to construct at good pace -- gaur, amrapali, prateek, all other builders in sector 7X and 11x.

    Lies after Lies after Lies...

    do u think Mr chandra will ever talk to us? we sought that permission too but seems like he was too busy with 2G

    BTW unihomes is a project for middle income group the guys who couldnt have bought THE ATS, THE gaur's, THE purvanchal's.... i know atleast 50-100 families will shift immediately if given possession. its not an investment for us its a dream of decent house.

    We are planning to go for arbitration or Consumer court so as to teach them a few good lessons on why to not mess up with general public.
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  • I am with you on this Mr Mehrotra & wish you good luck on this arbritration. Fake CRMs should get chucked out. All Unitech Noida project members should unite under one umbrella to put pressure & ensure that construction is done within the timelines.
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  • Still no improvement in Unihomes site.Very pathetic situation. Buider is not tellling honestly what is the problem and when construction will start again ?
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  • Survey Bhai ~ Snacks news pe hamesha nazar rakhte ho aur hum sabke liye update karna nai bhoolte :D
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