The insolvency resolution professional of real estate company Supertech is likely to issue an advertisement, calling for claims from homebuyers and financial creditors on March 29, according to people familiar with the development.
The financial creditors of RK Arora-promoted Supertech include lenders such as Union Bank of India, IDBI Bank, L&T Finance and Indiabulls Housing Finance. Till now, only Union Bank and IDBI Bank have submitted claims to the National Company Law Tribunal (NCLT), said one of the persons mentioned above.
Supertech was taken to the NCLT after defaulting on a payment of Rs 431.9 crore, pushing its customers and lenders into uncertainty over their financial exposure. The builder has ongoing residential projects in the National Capital Region.
The Delhi bench of the NCLT admitted the case on March 25 on a petition filed by Union Bank of India for non-payment of dues and declared Supertech insolvent
. The tribunal appointed Hitesh Goel as the IRP for Supertech under the Insolvency and Bankruptcy Code.
Among banks, Union Bank is the lead lender to Supertech with a loan of about Rs 400 crore, while IDBI Bank is estimated to have lent Rs 150 crore to Rs 200 crore, the person said.
Committee of creditors
reported on March 25 that Indiabulls Housing Finance, which classified Supertech as a non-performing asset account in October 2018, expects to recover the entire amount it lent to Supertech in 12-18 months.
The resolution professionals are fixing the structure of the committee of creditors, which will vote on the winning bidder for Supertech. The CoC is a panel of representatives of creditors that reviews plans submitted by bidders and selects one for approval by the NCLT.
Homebuyers are also recognised as financial creditors and have representation on the CoC.
“The process is complicated. It depends on the constitution of the CoC. How much of a voting right will financial creditors have and homebuyers have?” a second person asked. “The resolution professionals are also studying project-specific details. The viability of certain projects needs to be tested and studied.”
Legal experts said going by the precedents of realty company resolutions, the insolvency proceedings are likely to stretch out for over a year.
Meanwhile, those who booked apartments at Supertech properties are reaching out to the insolvency professionals on the role that they can play to quicken insolvency proceedings.
“People are looking to understand the process. There is less panic but soon a detailed FAQ will be issued on how these homebuyers and others can apply for any claims that they may want to make,” one person said.
Supertech said in a statement it would challenge the insolvency proceedings in the National Company Appellate Law Tribunal. The builder also said that the business of other group companies will not be affected by the proceedings.
“In the interest of homebuyers, preference was given to construction and delivery of projects over repayment of bank dues, which can be fulfilled after project completion. As all the projects of the company are financially viable, there is no chance of loss to any party or financial creditor. The order will not affect operations of any other Supertech Group Company,” it said in the statement.
With Supertech going into insolvency, over 25,000 homebuyers may have to wait longer for delivery of their flats, experts said.
The Supreme Court in August ordered the demolition of Supertech’s 40-storey under-construction twin towers located in Noida for violation of building norms in collusion with officials.