Lodha Group's bond yield spikes to 71% in Hong Kong market


By Sonal Bhutra, CNBC-TV18   
Dated: August 02, 2019

The bond yields of one of India's largest real estate players, Lodha Group, spiked to 71 percent on Thursday, indicating the possibility of default by the company.
However, Lodha Group in its statement to CNBC-TV18, said that its bond is extremely thinly traded and hence, price is highly variable. They added that their debt is high but there is no interest or repayment default and their debt maturity is greater than three years.
The real estate firm admitted that it is facing challenges and is hit by the liquidity crunch in the sector.
There has been negative action by rating agencies in the past and the company said that it is with respect to the refinancing/repayment of its US dollar denominated bond.
Lodha Group has made arrangements for repayment and definitive documentation is underway. They expect the process to be completed in the next 8-10 weeks. However, in the interim, they believe the rating agencies can take negative action due to concerns and pressures.
The company also updated CNBC-TV18 about their operational performance.
One of Lodha Group's London project is complete and deliveries have started. A second project will be completed this fiscal. The group expects £600 million from these projects after paying off the project debt.
Lodha Group's collection in Indian business for FY19 amounted to Rs 9,200 crore.
From unsold inventory, including those completed and currently under construction, sales are expected to be worth Rs 27,000 crore and residual cost is around Rs 9,000 crore. Lodha Group has ready rental assets worth around Rs 2,000 crore and other assets under construction.
The company has 50 million square feet of ready-to-start projects with approvals and 4,000 acres of unencumbered land bank with book value at Rs 6,700 crore and market value at Rs 20,000 crore.

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