CARLYLE GROUP – RTN asia

PNB Housing, the housing finance company in which the US-based Carlyle Group and Punjab National Bank own around 32% each, has clarified that its total exposure to real estate firm Omaxe Ltd was less than Rs 635 cr. The clarification came on the heels of social media reports that Omaxe Ltd was in some sort of financial trouble, and a sharp fall in the real estate company's share price. Among the lenders named as having exposure to the firm is PNB Housing, which has already seen its stock decline by about 75% over the last two-and-a-half years due to various factors such as a massive fraud at its parent PNB, a deteriorating operating environment for non-bank finance companies and a slowdown in the real estate market that is pushing its borrowers towards financial uncertainty. "PNB Housing has sanctioned INR 650 crore of term loan to the Group. Out of that, INR 635 crore is disbursed and the principal outstanding as on 30 September 2019 is INR 456 crore," the infrastructure lender said. However, it did not disclose the total amount outstanding, including interest. PNB Housing said it disbursed its loans more or less equally for three projects: The Lake Phase 1 and Phase 2 in Chandigarh and The Grand at Lucknow. Out of these, said PNB Housing, the Chandigarh projects are complete to the extent of 75% and 85%. This makes it more likely that PNB Housing will be able to recover its money from the sales of the units. The flats in these units are valued at between Rs 60 lakhs to Rs 2 cr, according to PNB Housing. In addition, Omaxe has also given additional collateral worth Rs 338 cr for one of the projects. However, the third project -- The Grand, Lucknow -- for which there is an outstanding of Rs 178 cr, is only 22% complete. PNB Housing said construction has been slow because the soil was soft and required piling. Out of the 1,036 flats in the project, 30% have been booked by consumers. The value of the security given by the company -- which includes the estimated value of the flats when complete -- is Rs 278 cr, which is 1.6 times the outstanding amount, the housing finance company said. STEADY DECLINE PNB Housing Finance has seen its shares fall steadily from around Rs 1,600 in July 2017 to the present value of Rs 429, a fall of around 73%. At the same time, the Nifty benchmark index of the National Stock Exchange has gone from around 10,000 to 11,861 -- fueled by a tide of cheap money from the US Federal Reserve. Omaxe shares hit the lower circuit on Monday, falling 20% from Rs 176 to Rs 144 on Monday. It has since recovered to Rs 154. Omaxe Group, which has operations in 8 states, is a well-recognized real estate brand in India and has delivered over 123 projects, or about 29.54 lakh square meters of saleable area. Out of these, 97 projects (81 .74 lakh square meters) were under its own banner. The company currently has 30 projects under construction, including flats, townships and commercial projects. The total saleable area of these projects is 98.12 lakh square meters.

Tag: CARLYLE GROUP

PNB Housing issues clarification on Omaxe exposure