Amrapali Seeks Outside Help To Finish Projects
When the news that real estate major Amrapali is headed towards insolvency first became public last year, the three directors of the group ─ Anil Kumar Sharma, Ajay Kumar and Shiv Priya ─ had assured buyers that they "intend to complete all our ongoing projects", and were "not running away from the country”. Following a restraining order from the Supreme Court (SC) which directed them not to leave the country, the three had submitted their passports to the Noida District Authority, along with a six-page letter, in August last year. In their letter, the promoters assured buyers that the company was "making efforts to deliver all flats by 2020".
Terming it a complicated case, the SC on January 31 asked Amrapali to show it a comprehensive plan as to how it planned to complete its stuck projects. Going by the recent response of the company, it is hard to say whether the company would be able to deliver its promise within that deadline.
On February 20, the trouble-hit group sought the SC’s permission to take help from other developers to complete projects as it was “not in a position to do so and hand over possession of flats to over 42,000 homebuyers in a time-bound manner”. The company told the apex court in an affidavit that several players have shown interest in assisting it finish the projects.
Days before this development, real estate major Supertech announced its plans to partner with other builders to complete their stuck projects.
According to media reports, the group has a standing liability of Rs 1,000 crore to about 10 banks. It also owes about Rs 3,000 crore to Noida and Greater Noida authorities, the areas where the group has been most active. To complete its various ongoing projects, the company would require about Rs 3,000 crore.
“Apart from the massive inventory which has been sold and is at various stages of development, the ongoing projects of Amrapali group have vacant land available (earmarked for future development) which can be developed with the assistance of co-developers and, subsequently, sold to prospective buyers,” the company said in its affidavit submitted to the SC.
"This would provide for the necessary liquidity and cash flows for payment to the creditors and also investments in projects that unfortunately have negative cash flows,” the said.
"The plan will not only provide for speedy construction of houses but would also facilitate and ensure payments to all the creditors, including those who have already approached the NCLT for insolvency proceedings," it further added.
The apex court is hearing a plea filed by Amrapali Silicon City Flat Owners Welfare Society against an order of the National Company Law Tribunal (NCLT) that admitted Bank of Baroda's insolvency petition against Amrapali's Silicon City project in Noida. The NCLT had admitted insolvency proceedings against the group, and appointed an interim resolution professional to manage the affairs of the company on September 4 last year.
With inputs from Housing News