Unitech board meet to appoint advisors for demerger

Source: Press Trust of India / New Delhi March 31, 2010, 11:35 IST

Unitech, the country's second largest realty firm, today said its board will meet on April 6 to discuss appointment of advisors for exploring opportunities for a potential restructuring of its businesses to unlock value for shareholders.

In a filing to the BSE, Unitech said the board will "consider appointing advisors for exploring opportunities and making suggestions to the board and the company for potential merger of subsidiaries, demerger and other forms of restructuring, or acquisitions, or spin-off with the ultimate object of enhancing and unlocking shareholder value."

According to industry sources, the realty major is planning to demerge its non-core businesses of telecom and hotels.

The new infrastructure company would include Unitech's telecom, hotel, SEZ and construction businesses, they added.

Unitech also plans to list the new company, sources said, adding that the company's shareholders would get shares in the new firm at a swap ratio, which will be decided in due course.

According to the sources, IDFC and UBS are likely to be appointed as advisors for the demerger process.

"The objective is to unlock the value of non-core businesses for Unitech shareholders. The current market price does not reflect the value embedded in the various non-core businesses of the company," a source said.

Unitech's holding in its telecom joint venture 'Uninor' would be transferred to the new company, sources said.

Norway's Telenor holds 67.25 per cent stake in Uninor, while the remaining is with Unitech. Telenor has paid over Rs 6,000 crore for the stake, valuing the company at close to Rs 10,000 crore.

Uninor has started operations in eight telecom circles and is planning to ramp up business in coming months.

Shares of Unitech were quoting at Rs 72.85, marginally up by 0.14 per cent in morning trade on the Bombay Stock Exchange.