Realty firm hopes to clear its dues bythe month-end
LIC could take physical possession of Unitech’s assets in Noida if the real estate firm fails to clear its debt of ₹150 crore to the Government-owned insurance major.
With pressure mounting to clear its debts, Unitech is said to have sold land parcels in Bangalore and Mysore. Also, on the cards is the sale of hotel in Noida. The company hopes to raise ₹1,000 crore in the short term through these sales.
Sources close to the development said the company has sold 11 acres of land in Mysore and Bangalore to a developer for ₹130 crore. The sale comes at a time when reports have been indicating that LIC was moving closer to taking “possession” of a 350-acre land parcel owned by Unitech in Noida.
Sources said Unitech was likely to clear its debt by March-end and the property would be handed back to the company once the accounts have been settled. LIC has also issued a notional possession notice for another property, which Unitech had offered as collateral for the loan. “Notional possession” is a step closer to physical possession.
When contacted by Business Line, LIC Chairman SK Roy said: “As a matter of policy, we don’t comment on individual company matters.”
A Unitech spokesperson said the company is in the process of making the necessary payments by March 31, 2014.
In December, LIC Housing Finance had denied any exposure in Unitech and had also said that it had not issued any default notice. Real estate sources had said that Unitech had taken a loan of ₹300 crore from LIC Housing Finance in 2007. It has so far repaid ₹100 crore.
Unitech has been facing headwinds due to a slump in the real estate market. Additionally, Managing Director Sanjay Chandra has been facing criminal charges in the 2G scam.
The company had a net debt of ₹6,299 crore as of December 2013. Unitech has a debt-equity ratio of 0:54.