Bad debt: Hiranandani project auction on March 3
Jan 30, 2014
Source : The Times of India
MUMBAI: Housing Development Finance Corporation Ltd (HDFC) on Wednesday invited bids to auction 158 acres of Hiranandani Gardens near Chennai after the developer failed to repay a Rs 539 crore loan.

The Chennai township project and one in Panvel, controlled by the Niranjan Hiranandani family, are embroiled in controversy, as lenders - Indian banks as well as global investors - are desperate to recover their money running into a few thousand crore rupees.

Both projects are stalled, leaving hundreds of families who had booked flats in the lurch. A dispute between Niranjan Hiranandani and his daughter Priya Hiranandani Vandrevala has further stirred the pot.

HDFC has set a reserve price of Rs 551 crore for the auction scheduled to be held on March 3.

"This is a rebid by HDFC," a Hiranandani Palace Gardens Chennai spokesperson said. "As stated earlier, Mr Niranjan Hiranandani has been disassociated with Hirco for the last three years and it is sad to see world-class locations with world-class construction go this way. Since the overseas investors have refused to recapitalize the project companies with capital needed, the bank needed to take this action to protect the Indian consumers and the Indian banks. We are now working to assist the flat purchasers of the project."

In 2006, father and daughter were part of an investment company, Hiranandani Infrastructure & Real Estate Company (Hirco), which was listed on the Alternate Investment Market of the London Stock Exchange; the company raised around Rs 3,000 crore from global investors for the two townships.

Both stepped down as chairman and CEO, respectively, of Hirco in 2010. In February last year, Hirco sued them, alleging they had committed fraud and other misconduct prior to their resignation in 2010.

The claim seeks damages of almost £220 million. Both have contested the proceedings.

The Hiranandanis had set up two special purpose vehicles (SPV), Hiranandani Palace Gardens and Sunny Vista Realtors, to develop the two townships and raised close to Rs 1,400 crore from financial institutions HDFC, Tata Capital, PNB, and LIC Housing Finance, among others. The total default by these two SPVs is believed to be over Rs 1,000 crore.

Early this month, Hirco said it found that cash collections for Panvel and Chennai were about £192 million (under Rs 2,000 crore) till November. The Chennai and Panvel assets had a value of £556 million (around Rs 5,500 crore). The secured assets debts of some or all of these assets is £101 million (Rs 1,000 crore).

"Hirco Plc has therefore written to the directors of the Indian project companies, demanding an explanation as to how and to whom the cash collections were disbursed and why the companies were unable to repay the debts," Hirco said.

Panvel project stalled

Work on the firm's project in Panvel, Raigad district, has been stalled since last year. The project has a mix of commercial and residential properties and is spread over 588 acres. More than 1,000 flats are believed to have been sold in Panvel.


Latest Realty News

RBI seeks to control inflation: India Inc
Jan 29, 2014
MUMBAI: The Reserve Bank of India's move to increase repo rate by 0.25 basis points is aimed to control rising prices rather than encouraging economic growth, say CEOs.
10 things to watch for in the commodities space
Jan 29, 2014
MUMBAI: Citi commodity research has come out with a report highlighting 10 areas that should be watched as they will have an impact on the world’s largest commodity consumer with 40 per cent market share. These factors could shape commodity prices and demand outlook in the coming months and years.
Business leaders decry rate rise
Jan 29, 2014
MUMBAI: The Reserve Bank of India (RBI)'s raising of the repo rate (at which it lends to banks for the short term) by 0.25 basis points is aimed to control rising prices rather than to encourage economic growth, say chief executives (CEOs) of companies.
The case for a land value tax
Jan 29, 2014
MYSORE: In a feudal society like India, land ownership has always been a source of wealth and power.
BMC’s preparatory report for ‘Development Plan’ made public
Jan 29, 2014
MUMBAI: The Municipal Corporation has undertaken the work of revision of the ‘Development Plan’ for Greater Mumbai for the 2014-2034 period (20 years). The work of revision of the ‘Development Plan’ is being carried out by municipal engineers, urban planning consultants and M/s Groupe SCE(I) Ltd. As a part of this exercise, the work of Existing Land Use survey (ELU) was completed in the year 2012 and the same was also thrown open to the public for comments till March 30, 2013. The comments recei
Home away from home near Mumbai
Jan 29, 2014
MUMBAI: Owning a home is considered one of the most important investment decisions for anyone. Purchasing a second home is thus, the second most important decision. Having an asset that provides rental income can mean long-term financial security. In addition, appreciation in capital values can result in a significant corpus via sale of the asset, if and when needed. Many second home buyers from Mumbai also invest in second homes, primarily for the convenience of having a weekend getaway or to a
PE for the mid-income housing segment in tier-II and III cities
Jan 29, 2014
MUMBAI: Tier-I cities in India have seen tremendous growth over the past several years and are now close to saturation in terms of their ability to offer sustainably lucrative investment opportunities in various industries. Tier-II and III cities, on the other hand, still boast of relatively untapped demand in various industries, which is only going to get accentuated over time, as these cities witness progressively higher growth enabled by concerted attention from a range of players.
Pune’s Koregaon Park: The elite’s delight
Jan 29, 2014
PUNE: Koregaon Park is arguably the swankiest and among the most expensive real estate destinations in Pune. Even before the Osho Commune was established here in the 1970s, it was a location of choice for bungalows. After the arrival of the Commune, it became one of the primary congregation hubs for multinational travellers. The existence of the Osho Commune has transformed Koregaon Park beyond recognition. It now has its own identity, which is very different from that of any other area in Pune.
Banking, realty stocks gain ahead of RBI policy
Jan 28, 2014
MUMBAI: Key benchmark indices trimmed gains after hitting intraday high in morning trade. The barometer index, the S&P BSE Sensex, was up 39.94 points or 0.19%, off 29.12 points from the day's high and up 33.17 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Sebi unhappy with fund houses' efforts to increase reach
Jan 28, 2014
MUMBAI: Securities and Exchange Board of India (Sebi) has raised concern over lack of efforts shown by mutual fund houses to penetrate beyond the top cities, despite the extra incentives provided by the regulator.

Latest Realty News Of State

Realty Talk's