Supertech Construction Resumption Plan: Key to Delivering 15,000 Homes in NCR
Supertech, a prominent real estate developer, has submitted a comprehensive plan to the Uttar Pradesh government to resume construction on several projects in the National Capital Region (NCR). The developer has been grappling with multiple legal cases from homebuyers due to delayed deliveries, as well as an investigation by the Enforcement Directorate.
Supertech’s financial obligations are substantial, with total dues to banks and development authorities amounting to approximately Rs 8,000 crore. However, the company is optimistic about its financial health, citing project receivables from both launched and yet-to-be-launched projects that exceed Rs 14,000 crore, indicating a positive net worth. This Supertech construction resumption plan aims to leverage these receivables to address the financial challenges.
The company is currently tasked with delivering around 15,000 homes. To facilitate this, Supertech has requested the authorities to initiate the registry process for projects that have already obtained completion certificates. According to RK Arora, Chairman of Supertech, this move would encourage buyers to pay the remaining balance, thereby improving cash flow. Presently, negative sentiment has led to a halt in payments from buyers.
Supertech’s proposal includes a request for the authorities to consider the Covid-19 pandemic and pollution-related bans as zero periods and recalculate the dues accordingly. The company owes Rs 2,670 crore to the land authority, with nearly half of this amount being interest on the land cost. Additionally, Supertech owes Rs 830 crore to various banks and is dealing with an insolvency case against one of its group companies.
To address these financial challenges, Supertech is in the process of selling some land parcels to provide an exit for lenders and plans to use the remaining funds to accelerate construction on stalled projects. The company also sees potential revenue in launching new towers within existing projects, estimating a revenue potential exceeding Rs 10,000 crore, with construction costs projected to be less than Rs 5,000 crore.
Construction activities in all projects within a 10-kilometer radius of the Okhla Bird Sanctuary were suspended as per orders from August 14, 2013, and work could only be resumed two years later. Supertech is seeking a zero period for this duration as well.
By implementing these measures, the Supertech construction resumption plan aims to overcome its financial hurdles and expedite the completion of its ongoing projects, ultimately restoring confidence among homebuyers and stakeholders.
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