1:1 Unitech share swap for demerged entity

The board of Unitech Ltd, India’s second largest real estate developer by market capitalisation, cleared a 1:1 swap ratio for the demerger of its subsidiary Unitech Infra. The mothership will now focus only on its core business of building and selling properties. The promoters will now hold 35% or about 1,408 million equity shares of Unitech Infra, while the rest will be held by the public. Unitech Infra would cease to be a wholly owned subsidiary of Unitech.

The spin off includes the business of amusement parks and hotels, construction business; and investments in the infrastructure sector, which includes investments in telecommunications, transmission towers, hotels, amusement parks, special economic zones, IT parks, logistics parks, industrial parks, property management operations and township management operations, including all assets and liabilities.

The developer’s board has also asked the restructuring committee to evaluate and consider proposals for further reorganisation of the company or its assets in any manner to create value. It has also constituted a committee to evaluate any potential acquisition, but did not provide any further details.

Unitech Infra would now comprise 40% stake in Unitech Corporate Park (UCP), 50% stake in Unitech Amusement Park, 32.5% holding in Uninor Wireless and the in-house construction and power transmission divisions. UCP has six properties including five SEZs and one ITpark, with a total development potential of 21.4 million sq ft in which the assets are valued at about Rs 3,500 crore.