SBICAP Ventures, the manager for the government's Rs 25,000-crore stressed-asset fund, has transferred the first tranche of disbursement worth around Rs 100 crore for the six projects by the erstwhile Amrapali Group located in Noida and Greater Noida, sources said.
“We have received around Rs 100 crore as part of the first tranche so far. With this construction work on the six projects will be expedited,” NBCC sources said.
There was no confirmation on the amount from SBICap.
“The disbursement has started. We will disburse as per construction and according to the pace of construction. We have committed Rs 650 crore and we will disburse as required and as construction expenditure is incurred in the project,” Irfan A Kazi, Chief Investment Officer of the SWAMIH Investment Fund told Moneycontrol.
SBICap had on August 4 signed an MoU with the court receiver, appointed by the Supreme Court to monitor stuck Amrapali projects, for funding Rs 650 crore for six projects in Noida and Greater Noida.
At the Amrapali hearing in Supreme Court on August 13, the court receiver informed the bench that SWAMIH Fund had transferred Rs 10 crore as token amount and that another chunk is expected within a fortnight.
The bench had said that “all banking formalities have been completed and the first token release has taken place and the amount transferred to NBCC.”
He had also informed the court that UCO Bank, Bank of Baroda, and Bank of India have agreed to form a consortium to provide financial assistance to stuck Amrapali projects post the meeting held with 10 banks and their counsels on August 9.
NBCC sources said that formalities are currently on with banks.
The next court hearing is expected to take place on August 31.
The SC on October 13, 2020, had permitted the court receiver to incorporate a special purpose vehicle (SPV) to enable flow of funds from SBICap for completion of unfinished projects. SBICap has agreed to fund Rs 650 crore for around 7,000 stuck units.
It is for this reason that the company Amrapali Stalled Projects Investments Reconstruction Establishment (ASPIRE) has been floated. It consists of a court receiver, a forensic auditor and a chartered accountant. It is a not-for-profit company under Section 8 of Companies Act, 2013.
"ASPIRE has so far received around Rs 100 crore from SBICap and the amount has been transferred to NBCC," NBCC sources said.
The projects receiving the funds include Silicon City-1, Silicon City-2, Crystal Homes, Centurian Park- Low Rise, O2 Valley and Tropical Garden where 6,947 units are stalled of which 6,132 units are sold but homebuyers are awaiting delivery.
These projects were launched almost 10 years ago between 2011 and 2013 and have been delayed for more than 4-5 years from their promised delivery timeline. The execution works on the said projects were hampered due to the slow inflow of funds and disruptions caused by the COVID-19 pandemic.
However, funding from SBICAP Ventures Ltd, NBCC shall expedite the progress of the works and will aim to complete the projects within the scheduled time, NBCC had said in a statement.
The Court receiver will be assisted by NBCC, which took the construction contracts for these projects after a Supreme Court order and is involved in the completion of about 22 Amrapali housing projects, which were stalled amid a fund crunch due to financial mismanagement at the erstwhile Amrapali Group.
The Supreme Court on August 2 had asked banks to relax the funding criteria for stalled Amrapali projects that include submission of collateral security and corporate guarantees, saying that lending to the projects be treated as a special case since it was being monitored under the supervision of the apex court.
The court had in 2019 asked the government’s construction arm to finish and deliver 38,159 flats by 2023 after several homebuyers sought its intervention, complaining about years of delay in handing over their homes.
The total cost of completing all stuck projects by Amrapali Group is approximately Rs 8,500 crore. NBCC is executing these projects as PMC and would get 8 percent as fees. It is not using its funds, which are being facilitated by a receiver appointed by the Supreme Court.On July 23, 2019, the top court cancelled the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act, 2016, and ousted it from its prime properties in NCR by nixing land leases for breaching buyers’ trust.