The Mortgage Roadmap

Lodha Developers Repay Rs 25 bn Bank Loan

10th February, 2012 - Posted by admin - No Comments

© Peter Richmond

In a massive turn of events, India based Lodha Developers have repaid a 16.4 billion rupee ($333.6 million) loan to Deutsche Bank, which gained 9 bn rupees on the loan. Lodha Developers paid Rs 25 bn to the bank, giving Deutsche a 55% return on its Rs 16 bn initial investment making it one of the biggest real estate FDI transactions in history.

Lodha Developers, who are one of Mumbai's biggest realtors, repaid the bank loan with 17.2 billion rupees of cash on hand and 8.25 billion rupees raised by issuing non-convertible debentures. The amount for the bank loan was repaid on account of sales of 50 % of the flats in the 117 storey World One tower of the company, which would become the world's tallest residential building once it is completed in 2015. The cost of each flat in the project ranges from $ 1.5 million to $ 15 million. The bank loan was given to the company in the year 2007 via a convertible debenture issue and the outlook on its repayment had to be rescaled each year due to global economic conditions.

However with the bank loan now paid off, Lodha Developers' total debt stands at Rs 30 bn from Rs 40 bn, causing a 25 % improvement in the balance sheet; as well as leaving them with a 15 bn rupees surplus cash which the company looks forward to invest in FY13.