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Default Rs 432 Crore Supertech Leads To Bankruptcy Order

Supertech: This was the second major setback for Noida -based developers last year.

New Delhi:

The inability to pay fees of around Rs 432 crore caused an Indian bankruptcy court to order insolvency proceedings against real estate firm Supertech Ltd, one of the Supertech group companies, documents showed on Friday.

Supertech Ltd on Friday was declared bankrupt by the National Companies Law Tribunal (NCLT), a move that may have implications for the firm’s 25,000 home buyers of the firm’s ongoing projects in Delhi and NCR provinces.

The decision on the petition filed by Union Bank of India, NCLT said: “There is a default in the payment of financial debts” and appointed Hitesh Goyal as Interim Resolution Professional (IRP) to replace the board of Supertech Ltd.

A two -member NCLT bench comprising PSN Prasad and Rahul Bhatnagar said documents submitted by financial creditors Union Bank of India as well as corporate debtors Supertech had “confirmed” the former’s allegation that there were debts where builders had defaulted.

“Based on the above discussion, after careful consideration of the whole matter, hearing the arguments of the parties and having appreciated the documents placed in the record to substantiate the claim, the tribunal acknowledges this petition and initiates CIRP on corporate debtors with immediate effect , “said NCLT. CIRP refers to the Corporate Insolvency Settlement Process (CIRP).

In addition, Supertech is also prohibited from transferring, encumbering, alienating or disposing of any assets.

The default involved a loan granted by Union Bank of India to the Eco Village II project in Greater Noida (West) in Uttar Pradesh, which is being developed for Rs 1,106.45 crore.

In 2013, Supertech Ltd had contacted various financial institutions to obtain a credit facility of Rs 350 crore from a consortium of banks, and of them, Union Bank of India, the leading bank, had an exposure of Rs 150 crore. The loan agreement was executed between the bank and Supertech on December 30, 2013, but the company has repeatedly failed to make timely payments since then.

This is the second major setback for Noida -based developers last year.

On August 31 last year, the Supreme Court ordered the demolition of Supertech Ltd’s 40 -storey twin towers, which are part of the Emerald Court project currently under construction in Noida for violating building norms.

Supertech Group said it will challenge the order before the National Companies Law Appeals Tribunal (NCLAT).

However, it also added the NCLT order would not affect the operations of other Supertech Group companies.

Supertech Ltd has 38,041 customers and of them, homes were delivered to 27,111 people. A total of 10,930 houses have yet to be delivered and among them, more than 70 per cent of construction is complete for more than 8,000 houses, according to Supertech Group Managing Director Mohit Arora.

When contacted, Mr Arora told the PTI news agency, “there are around 11-12 housing projects in Supertech Ltd for which insolvency proceedings have been initiated. About 90 per cent of these projects have been completed.” Supertech Ltd’s debt is around Rs 1,200 crore, including nearly Rs 150 crore loan from Union Bank of India, he added.

According to Mr Arora, three to four other companies in the group are developing many projects across Delhi-NCR, including the Supernova luxury project.


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