|Chennai||Rs. 27580.00 (0.18%)|
|Mumbai||Rs. 28700.00 (0%)|
|Delhi||Rs. 27700.00 (0.73%)|
|Kolkata||Rs. 28270.00 (0%)|
|Kerala||Rs. 27050.00 (0.74%)|
|Bangalore||Rs. 27350.00 (1.11%)|
|Hyderabad||Rs. 27660.00 (1.21%)|
Dream hillstation project Lavasa, near Pune, is now a millstone around lenders' neck.
Following its default in servicing loans, some banks have treated Lavasa Corporation account as non-performing asset (NPA) in the fourth quarter, ended March 2012.
Banking sources said lenders, including Union Bank, had treated it as NPA.
The loan exposure of 10 lenders is around Rs 850 crore. Banks have also invested in the debentures of the company. This portion (investment) is still being serviced and so is being treated as standard account.
The company officials were not available for comment.
Lavasa Corporation is jointly promoted by Hindustan Construction Company (HCC), Venkateshwara Hatcheries, Janpath Investments Ltd (an Avantha Group company), and Vinay Vithal Maniar, a trader and developer based in Pune. HCC, through its subsidiary and group companies, holds 65.01 per cent stake in Lavasa Corporation.
Senior bank executive said project lending was done with commercial consideration but issues relating to environmental clearances created challenges. The company is under severe financial strain due to project delays.
Lavasa Corp is working on a project to create an integrated hillstation township called Lavasa, spread over 12,500 acres, providing residential, business and leisure tourism and educational infrastructure. The project was envisaged to be taken up in four phases with development activities up to 2021.
Lavasa's parent, Hindustan Construction Company (HCC), has already been referred to corporate debt restructuring forum to lessen the burden and give more time for repayments. Lenders' exposure to HCC is close to Rs 8,000 crore.
A public sector bank official said HCC was hit by delays in payments for finished projects and a high interest burden.
In January 2012, ratings agency CARE had downgraded bank facilities of Lavasa Corp to "D" grade from "BB". Delays in payment towards principal and interest obligations for term loans had triggered a rating downgrade.
The resumption of work at Lavasa site was sluggish, in spite of receipt of approval from the ministry of environment and forests and due to the strained liquidity profile of the company, CARE had said.
In November 2010, the environment and forests ministry had slapped a notice on Lavasa, asking it to justify why the illegal structures on the 25,000-acre complex should not be demolished for violation of the Environment Protection Act.
Lavasa was ordered to stop all on-site construction till the Centre took a decision on the showcause notice.