The new Board of Unitech Limited may access the real estate distress fund the Union Cabinet approved in November 2019 to finish incomplete apartments.
The Supreme Court of India, on Monday, accepted the Centre's proposal to take over the management control of Unitech Limited. The government will appoint 10 directors on the company's board - they would be responsible for completing pending projects. This comes as encouraging news to a reported 12,000 homebuyers taken for a ride by the company's earlier management.
The distress fund has received well over 100 applications thus far, of which four have been cleared recently. The 'Special Window' fund provides priority debt financing, particularly for middle-income housing.
"The purpose is to not take over a company or its operations. The primary responsibility of the Board would be to complete the projects," Niranjan Hiranandani, Managing Director of Hiranandani Group and National President of industry body NAREDCO told Business Today. Hiranandani is one of the directors the Centre proposed for the new Board.
"Two, as far as we are concerned, this is a public service. There is no other interest for me. I am not a paid director. We have to ensure that the maximum number of homebuyers get their houses quickly and fast," he added.
The Supreme Court bench, led by Justice DY Chandrachud, also granted two-month moratorium to the new board of Unitech from any legal proceedings against the company's management. That would help avoid any distractions for the new Board.
"We would study the feasibility of starting these projects. The Supreme Court has given 60 days to study and put up the feasibility," Hiranandani said. "We can work out part feasibility of the projects so that some of the work can take of immediately. We can even take access to stress funds, which has been approved," he added.
The first Board meeting could be held before the end of this week, Hirandani hinted.
The four projects cleared to access distress funds thus far could receive funding in the range of Rs 25 crore each. The government had stated that it would act as the sponsor and the total commitment to be infused would be up to Rs 10,000 crore. The fund will also bag investments from institutions such as LIC and SBI, which will expand the corpus to Rs 25,000 crore. The fund is set up as a Category-11 AIF (Alternate Investment Fund) debt fund registered with the market regulator Sebi; SBICAP Ventures Limited is the Investment Manager.