As part of this strategy, the developer has sold its chain of multiplexes across India, operated under the brand name Kulraj Broadway, for Rs 105 crore to Carnival Films. HDIL has entered into a definitive agreement with Carnival to sell its entire 100% shareholding in HDIL Entertainment, a wholly owned subsidiary of HDIL, the company said in a statement.
At the beginning of the financial year, HDIL had said that it will cut debt through a combination of sale of non-core assets, which include some businesses and land parcels, and rising cash flows.
“The sale of HDIL Entertainment to Carnival Films has been part of the group’s strategy to exit its non-core business and fully focus on its core business of real estate. This will also enable HDIL to reduce its debt as planned,” Hariprakash Pandey, vice-president (finance and investor relations), HDIL, said. In the quarter ended March 2014, HDIL reported sale of its 45% stake in an associate company, HDIL Leisure, which held a hotel in Juhu, for R290 crore.
The company has also been exiting land parcels in other Indian cities other than the Mumbai Metropolitan Region as it plans to focus on the Mumbai realty market.
Pandey said the company had already sold a small land parcel in Pune, and a portion of a 100- acre land parcel in Noida in the National Capital Region, for around R75 crore. HDIL is also scouting for buyers and JV partners for a 105-acre land parcel in Hyderabad. It was also looking to sell, or jointly develop, a 70-acre land parcel in Kochi. However, as it is an SEZ, progress has been slow, Pandey said.
He refused to comment on the amount likely to be raised by way of these steps, but said the company will meet its target of reducing debt by R800 crore by the the end of FY15 through a mix of land sales and internal accruals.
HDIL's net debt at the end of March 2014 stood at R2,441 crore, down 22% on a standalone basis, and consolidated net debt was 12% lower at R3,511 crore.
The stock closed up 0.44% at R103.15 on the BSE on Friday.