JM Financial, Suraksha ARC acquire Rs 2K cr Unitech loan; to take control of 23 realty projects

JM Financial and Suraksha Asset Reconstruction Company have acquired about Rs 2,000 crore loans extended by HDFC, HDFC Bank and ICICI Bank to crisis-hit realty firm Unitech, as well as will infuse funds to restart construction on 23 stalled projects, sources said. The Gurugram-based developer had 74 pending real estate projects, comprising 16,500 housing units, in August 2017, when its two managing directors Sanjay Chandra and Ajay Chandra were arrested. In the last two years, the company has completed about 22 projects comprising 4,000 units, while 52 projects are still incomplete.

According to sources, Unitech's loans worth Rs 2,000 crore have been transferred to JM Financial and Suraksha Asset Reconstruction Company (Suraksha ARC) mainly from HDFC, HDFC Bank and ICICI Bank.

After taking over bad loans, as many as 23 projects, comprising 5,250 units will become part of JM Financial and Suraksha ARC's portfoilios. To complete these projects, they will infuse some initial amount to kickstart construction work, sources said. Unitech spokesperson declined to comment on the development.

Out of 23 pending projects, as many as 16 projects, comprising nearly 4,600 units, would be handled by JM Financial; while Suraksha ARC would take control of 7 projects that have 650 units, sources said. It would require an investment of Rs 1,900 crore to complete the pending works in these 23 projects, sources said. However, these projects also have Rs 1,700 crore as balance receivables from customers from sold units and unsold units estimated at Rs 2,100 crore.

Chandra brothers were arrested after some homebuyers dragged the company and its directors to court for non-delivery of their apartments and sought a refund. A bail application was filed before the Supreme Court, but the apex court had directed Unitech to first deposit Rs 750 crore in the registry. The realty firm has so far deposited about Rs 480 crore.

Unitech will be left with 29 projects, comprising around 7,250 units, for execution after the transfer of 23 projects to JM Financial and Suraksha ARC portfolios. The developer plans to complete nine projects by utilising part of the funds that it has deposited in the SC registry, while the company is in talks with different ARCs for executing the remaining 20 projects, sources said.

To secure bail of its two directors, Unitech is in process of monetising its land bank to raise funds and deposit the same with the registry, they added.