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National: HCC Real estates sells land parcels in multiple places

HCC Real Estate Limited, the real estate branch of Hindustan Construction Co. Ltd. plans to sell land parcels about 40 acres of land in Pune, nearly 28 acres of land parcel in Thane and around 55 acres of land in Nashik.

 

The company had acquired huge land parcels a few years ago with the intention of developing a township. However, considering that the buyers in the real estate market amount to a very small group and not many developers are interested to collaborate with HCC Real Estates Limited, the better business decision was to sell these land parcels considering that the interest costs are very high.

 

In the recent past, debt ridden infrastructure major sold nearly 20 acres of land along the Mumbai Pune Expressway.

 

Favista’s view: Selling of land parcels as well as leasing property in order to make up for debts is quite a common financial practice adopted by many companies in the recent past, including companies like DLF and Air India respectively. Please refer to http://www.favista.com/cms/blogs/2012/11/03/national-dlf-lodha-deal-part-of-dlfs-plan-to-reduce-debt and http://www.favista.com/cms/blogs/2012/12/19/mumbai-ai-to-lease-its-building-just-not-to-sahara. Such a strategy should not necessarily bear any long term repercussion.

 

 

 

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