The National Company Law Tribunal (NCLT) on Friday launched insolvency proceedings against land engineer Supertech, which handles more than 30 projects in northern India, after a petition by Union Bank claimed a neglected levy of Rs 492 crore. The NCLT request referred to two transactions that went wrong. The first was in 2015 for Eco Village II in Greater Noida with an expected project cost of Rs 1,106 crore, in which a consortium of banks lent Rs 350 crore.
The company said it would approach the NCLAT to challenge the order and that homebuyers at its multiple properties need not worry as the case related to just one project. After multiple reports claimed around 25,000 homebuyers would be affected due to insolvency, a company spokesperson said Supertech had 38,041 customers, of which 27,111 delivered.
Union Bank was the lead creditor in the deal, accounting for Rs 150 crore in loans. In 2015, another credit facility of Rs 200 crore was extended to the company by Union Bank and Vijaya Bank, where each of the creditors provided loans of Rs 100 crore to the company. It was for phase II of the same project. Although Supertech argued that the bank failed to follow due process in classifying the loans as non-performing assets (NPA) and dragging the company to NCLT, the bankruptcy court decided to proceed with the complaint. ‘order.
“Buyers will now avoid products from Tier 2 and Tier 3 developers and stick to projects from Tier A players to avoid execution risk. buyers for their projects,” said Prashant Thakur, head of research at real estate consultancy Anarock. “In the interests of home buyers, preference has been given to building and delivering projects over ‘to the reimbursement of bank charges which may be paid after the completion of the project,’ the company said in a statement.
According to Sundaresh Bhat, Partner and Head of Corporate Restructuring Services at BDO India, property companies usually create Special Purpose Vehicles (SPVs) for each project or a group of projects which then act as entities dealing with banks. and home buyers. “When there is an insolvency case, it is usually against these particular SPVs which may be joint ventures, subsidiaries or associates of the parent company. It is the prerogative of the creditor to drag the whole group or just particular entities in the insolvency court,” he explained.
“As all of the company’s projects are financially viable, there is no chance of loss to any party or financial creditor. The order will not affect the operations of any other Supertech Group company,” it said. -he adds.
Supertech Group Chief Executive, Mohit Arora, told PTI, “There are about 11 to 12 housing projects in Supertech against which insolvency proceedings have been initiated. About 90% of these projects are completed.
Supertech’s total debt is around Rs 1,200 crore, including nearly Rs 150 crore in loans from Union Bank of India, he said.
According to Arora, there are three or four other companies in the group that are developing many projects through Delhi-NCR, including the Supernova project. “We have a strong track record of delivering over 40,000 apartments over the past seven years and will continue to deliver our buyers as part of our ‘Completion Mission – 2022′ under which we have committed to delivering 7,000 units by December,” the company says. According to a senior executive at a Delhi-based property company, bankruptcy law and RERA have failed to fully guarantee homebuyers’ rights. “What happened to the Jaypee Infratech case even after five years? So many home buyers still don’t know if they will ever get their money back,” he said.
Jaypee Infratech, owner of the Delhi-Agra highway and land on both sides of the highway, was referred to the NCLT in August 2017 under the bankruptcy code after defaulting on Rs 22,600 crore in loans. The lenders expect to sell the insolvent asset to Suraksha Realty by the end of this month as part of the bankruptcy process, ending a long-running litigation over the company’s bankruptcy. Suraksha Realty had made the winning bid of Rs 7,736 crore against NBCC India’s government bid of Rs 6,536 crore in June last year.
Summary of news:
- NCLT opens insolvency proceedings against real estate company Supertech
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