Three Amrapali companies may face insolvency move
Three Amrapali group companies – Noida’s Silicon City and Greater Noida – based Ultra Home Construction and Amrapali Infrastructure may face the process of corporate insolvency resolution under the insolvency and bankruptcy code on the plea of Bank of Baroda.
A bank official said the National Company Law Tribunal’s principal bench had reserved its verdict on the issue and may pronounce it any day now. The move will affect around 1,000 home buyers. According to the company, in all the three companies, the bank had outstanding amounts of much more than Rs 1,00,000, the minimum cutoff for initiation of insolvency proceedings.
In Silicon City, Bank of Baroda has an outstanding amount of Rs 56 crore in principal. Other lenders to the company are OBC and Bank of Maharashtra. Banks had given around Rs 300 crore in principal to the company which has returned Rs 305 crore so far and still owes Rs 156 crore. In addition, Silicon City owes the Noida Authority around Rs 550 crore. Besides this, JP Morgan also had also extended a secured loan of Rs 150 crore to the company. The first claim to receivables from the company will be that of the authority.
Silicon City is constructing its housing project in Noida Sector 74-75. The company has given possession to 2,500 home buyers. Of the remaining 1,000 apartments, the company is likely to give possession to another 500 apartments by December 2017. The construction of the other 500 apartments is at an advanced stage, it is learnt. The project is running behind schedule by around three years.
Amrapali contended that the delays were caused mainly due to stoppage of work due to various court orders and farmers’ agitations. It claimed that the entire project will be completed in the next one year, with internal cash flows such as receivables from buyers. It has also around 1.5 million square feet FSI to sell to meet other liabilities.