HDFC sells Unitech’s loan to JMFRC
DSIJ Intelligence / 19 Nov 2016
Due to Unitech’s defaulting on loan repayment, HDFC has sold the realty firm's outstanding loan of Rs 869 crore to JM Financial Asset Reconstruction Company (JMFARC). Against the total dues of Rs 869 crore in respect of these projects, the ARC has paid HDFC Rs 155 crore upfront.
Due to Unitech’s defaulting on loan repayment, HDFC has sold the realty firm's outstanding loan of Rs 869 crore to JM Financial Asset Reconstruction Company (JMFARC). Against the total dues of Rs 869 crore in respect of these projects, the ARC has paid HDFC Rs 155 crore upfront. Meanwhile, it has issued security receipts (SRs) to HDFC amounting to Rs 705 crore which will be redeemable over the period of construction.
Unitech has not been able to service its loan regularly due to sluggish sale of its apartments. Its current exposure to the Unitech group involves certain projects across various locations.
HDFC’s this account was deemed as standard assets at September end, and turned NPA (non-performing assets) only at the end of October, 2016. Due to irregular payment history, the lender made provisions of Rs 240 crore in respect of these accounts. There will be no further provisioning required as a result of the sale of the loans to ARC.
JMFARC will arrange for funds to support and kickstart Unitech’s projects. The progress of the projects and the resultant cash flows will thereafter be closely monitored. Unitech’s consolidated net debt stands at Rs 5265 crore in Q1FY17.
The share price of Unitech closed at Rs 4.59, with a gain of 1.32 per cent on Friday.
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