MUMBAI: Unitech, India's fourth largest real estate developer, defaulted on the payment of interest on a Rs 200-crore loan it had taken from Life Insurance Corporation of India (LIC) way back in 2007, joining the list of companies grappling with liquidity issues.
Later in the day, a UnitechBSE 3.19 % spokesperson claimed that the company has agreed to repay Rs 70-80 crore to LIC and will pay a bulk of the amount in the next two weeks. Unitech also claimed that it had already paid Rs 100 crore to the corporation. However, a confirmation could not be obtained from LIC about the builder's assertions.
Unitech had taken loans from both LIC and LIC Housing FinanceBSE 1.21 % in 2007 to develop properties in areas including Noida's Sector 96 on the outskirts of Delhi, which was pledged as collateral against the loan.
In a late night press release, Unitech said, "Due to our confidentiality agreement with the lender, we cannot comment on the specifics of these media reports. However, our financial results for the current quarter will reflect no pendency with the said lender."
A senior LIC executive, preferring anonymity, said that the realty firm defaulted on loans given by LIC. "We have sent notice to Unitech. Loans given by the housing finance company have been repaid. However, as indicated by media reports, there was no transfer of loans from LIC HFL to LIC," the executive said.
In August, LIC Housing Finance had sent a legal notice to Mumbai-based real estate developer Orbit CorporationBSE -0.33 %, which had defaulted on liabilities worthRs 96 crore, including repayment of loan and interest. Unitech shares crashed 9.54% to end the day at Rs 15.65 on the BSE.