From ET Realty
NEW DELHI: Embattled real estate major Jaypee Infratech Ltd (JIL), a subsidiary of Jaiprakash Associates Ltd (JAL), has completed the construction of 5,300 apartments along the Noida-Greater Noida Expressway and plans to hand over possession in two months.
Between 2008 and 2014, the company launched around 35,000 apartments and plots in the Wish Town along the Expressway. It also has over 10,000 apartments and plots in ‘Sports City East’ on the Yamuna Expressway, close to Noida.
Out of this, the company officials say possessions of over 2,500 plots have already been given. A company spokesperson said, the letters were being dispatched to customers to take the possession in its projects such as Kalypso, Pavilion Court, Pavilion Height, Town Homes, Wish Town Klassic and Kosmos in Wish Town on the Noida-Greater Noida Expressway.
JAL has recently put its Bhilai cement plant on the block. It expects to generate Rs 1,200 crore from the sale.
JIL is in talks with several developers to sell a chunk of its over 6,000 acre land bank to reduce the burden of crushing debt. The stretched balance sheet of the company has meant delayed possession of apartments booked nearly 4 years ago.
This has also increased the time for construction of several other projects on the Noida-Greater Noida expressway.
JIL has a debt of around Rs 9,000 crore taken to construct a toll-based 6-lane 165 Km access-controlled expressway, connecting Noida and the tourist town of Agra. The company was allowed to buy land along the expressway to develop them as real estate to cross-subsidize the construction of the expressway.
The company had acquired around 6000 acre of land in 5 parcels, each of around 1200 acres. Besides this, its promoter company JAL acquired 2500 acre of land close to Noida at the end of the Yamuna Expressway to develop the mega Formula One track.
The hectic pace of expansion meant the company added layers of debt.
With the infrastructure sector facing a cash and demand crunch, the company is finding it difficult to service the debt.
The Yamuna Expressway is also facing its own set of problems. The expected volume of heavy traffic on the expressway did not materialize as the roads which would have connected all the National Highways crossing Delhi and connecting Chandigarh, Dehradun and Jaipur could not be completed.
This has hit toll collection and piled more pressure on the company’s balance sheet and triggered talks of plans to sell the expressway.
But a company source ruled out any move to hive-off the expressway. A banker also said that selling the expressway was not being considered. The hiving off of the road project is not possible because of tax and other issues such as mortgage of the land.
Therefore, the company is trying to sell a part of its land holding. The company sold 250 acres of land to developer Gaursons for around Rs 1,250 crore. But they returned 50 acres after contracting to buy 300 acres.