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Event: According to media reports, the Siliguri Jalpaiguri Development Authority
(SJDA) has decided to terminate a contract with Bengal Unitech Universal Siliguri
Projects (BUUSPL), a 100% subsidiary of Unitech (UT), for development of a
township at Siliguri (a city located in West Bengal). The township was to be
developed over an area of 232 acres, including both residential and commercial
developments. The reason cited for termination is that BUUSPL has failed to pay
balance outstanding of INR 1.26 bn towards land acquisition (BUUSPL has till date
paid ~INR 0.9 bn for 92 acres of land).
Impact: As per UT’s FY10 annual report, BUUSPL is its 100% subsidiary and has
balance sheet size of ~INR 1.15 bn. As per UT’s QIP document, Siliguri land is spread
over 232 acres, of which, ~92 acres has been acquired with UT owning ~72 acres.
We have valued UT’s economic interest in the Siliguri land parcel for 92 acres, at
~INR 1.26 bn or ~INR 0.5/share. Post termination of the Siliguri land deal, BUUSPL
may receive ~INR 0.9 bn it has paid till date towards the land. In such a scenario,
the net negative impact on NAV will be ~INR 0.25 bn for UT. As per UT management,
the company will represent to the authorities that it be allowed to retain 92 acres
(representing the pro-rata area for which payment has been made) and forgo the
balance 140 acres.
Currently, the stock is ‘Under Review’ due to the overhang of the CAG report on
Uninor spectrum allocation and lack of clarity on Lehman’s put option in the Golibar
project.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Event: According to media reports, the Siliguri Jalpaiguri Development Authority
(SJDA) has decided to terminate a contract with Bengal Unitech Universal Siliguri
Projects (BUUSPL), a 100% subsidiary of Unitech (UT), for development of a
township at Siliguri (a city located in West Bengal). The township was to be
developed over an area of 232 acres, including both residential and commercial
developments. The reason cited for termination is that BUUSPL has failed to pay
balance outstanding of INR 1.26 bn towards land acquisition (BUUSPL has till date
paid ~INR 0.9 bn for 92 acres of land).
Impact: As per UT’s FY10 annual report, BUUSPL is its 100% subsidiary and has
balance sheet size of ~INR 1.15 bn. As per UT’s QIP document, Siliguri land is spread
over 232 acres, of which, ~92 acres has been acquired with UT owning ~72 acres.
We have valued UT’s economic interest in the Siliguri land parcel for 92 acres, at
~INR 1.26 bn or ~INR 0.5/share. Post termination of the Siliguri land deal, BUUSPL
may receive ~INR 0.9 bn it has paid till date towards the land. In such a scenario,
the net negative impact on NAV will be ~INR 0.25 bn for UT. As per UT management,
the company will represent to the authorities that it be allowed to retain 92 acres
(representing the pro-rata area for which payment has been made) and forgo the
balance 140 acres.
Currently, the stock is ‘Under Review’ due to the overhang of the CAG report on
Uninor spectrum allocation and lack of clarity on Lehman’s put option in the Golibar
project.
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