MUMBAI: Real estate firm Hirco has defaulted on payments to lenders for its two large Rs 1,000 crore-plus townships in Panvel and Chennai, casting a shadow on the future of the projects.

Work on the firm’s project in Panvel, outside Mumbai in Raigad district, has been stalled for the past few months. The project has a mix of commercial and residential properties and is spread over 300 acres. More than 1,000 apartments are believed to have been sold in Panvel.

Hirco claims to have more than 66 million sq ft of development in the two township projects being built by its subsidiary, Hiranandani Palace Gardens. Following the default, the residential township outside Chennai, the Hiranandani Palace Gardens, is under threat of a takeover by the lenders, TOI has learned.

HDFC had advanced around Rs 500 crore in two tranches to the Chennai project jointly promoted by Niranjan Hiranandani and his daughter Priya. (Both have since stepped down from the Hirco board.)

It is being built in three phases on an over-200 acre sprawl.

The lender has already classified the first tranche as an NPA (non-performing asset) and will classify the second tranche similarly. It plans to send a notice to the firm for repayment under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI).

If Hirco fails to pay up, HDFC will attach the Chennai property estimated to be worth several times the loan. The property would then be auctioned off. Market sources said one of the Hiranandanis may bid for it.

“Because of a family dispute, neither family member is willing to bring in the fresh capital required for the project. With RBI norms becoming stricter on project lending, there cannot be any progress unless promoters bring in money,” said sources familiar with the development.

Early this year, Tata Finance Capital Services dragged the company to court for a term loan default of Rs 76 crore, and demanded the company’s liquidation for non-payment.

Hirco’s chief financial officer, Samir Shroff, did not respond to text message and phone calls seeking comment.

A Hiranandani Constructions spokesperson said, “Niranjan Hiranandani resigned from Hirco Plc around 22nd December 2010. This knowledge is in public domain. Hence the details of the companies, which you are seeking now, is not available with us.” It is learned that Hiranandani has made an offer to buy out the company.

“It’s a mismanaged company,” said a senior executive who resigned more than a year ago. “A 1.75 million sq ft commercial building in the Panvel township is 75% complete. It could easily fetch Rs 500 crore.”

Hirco, listed on the London Stock Exchange’s Alternative Investment Market, was set up in 2006 to invest in residential and commercial complexes.

On June 27, chairman David Burton said in the company’s half-yearly statement that progress on the developments appeared somewhat subdued with only moderate progress over the last 6 months. The company had said in its annual financial statement in September 2012 that the completion of both the Chennai and Panvel projects remained at least a decade away.

“While information flow on the projects remains unsatisfactory and we have no real clarity over who is really in control of the projects, what does seem clear is that completion will need substantial further investment of both equity and longer-term debt,” Burton had said.

http://m.timesofindia.com/city/mumbai/Loan-defaults-stall-two-mega-townships/articleshow/24307703.cms

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