LIC to auction Unitech's land in Noida to recover Rs 184 cr

New Delhi: Insurance major LIC will next month auction Unitech's 14 lakh sq meter plot of land in Noida if the real estate company does not repay the entire dues of Rs 184 crore before that date.

Unitech had borrowed money from LIC by mortgaging the plot but with the real estate company defaulting on repayments, Life Insurance Corporation of India (LIC) issued an e-auction notice for sale of the plot on May 6 at a reserve price of Rs 2,660.56 crore.

When contacted, a Unitech spokesperson said the company would repay the outstanding amount to LIC soon.

"We are in the process of making the payment for outstanding shortly. We are close to finalising the funding for the same," the spokesperson said.

Sources said Unitech has recently raised Rs 85 crore from Piramal Group and is in talks with two private equity players to raise more funds for the development of this land parcel in Noida and to repay the LIC loan.

The notice for "public sale of immovable property mortgaged to the corporation under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002" was issued yesterday.

In the notice, LIC said that the outstanding dues for recovery of which property are being sold is Rs 184.12 crore as on March 31, 2016 plus interest from April 1, 2016 and other costs, charges and incidental expenses.

The property consisting of land measuring 14,07,327.68 square meter is located in Noida, Uttar Pradesh. This land is on lease of 90 years from Noida Authority by a lease deed executed on December 28, 2006 in favour of Unitech Hi-Tech Developers Ltd.

"This is also a notice to the above named borrower/ mortgagor (Unitech and Unitech Hi-Tech Developers) about holding of e-auction sale on the above mentioned date if the dues are not repaid in full before the date of e-auction," the notice said.

LIC said that it would be the responsibility of the interested bidders to inspect and satisfy themselves about the property before submission of the bid.

Unitech's consolidated net debt as of 31 December 2015 stood at Rs 6,802.05 crore. Net debt to equity ratio was 0.64.

The company's share price closed at Rs 5.04 apiece on the BSE, up 1.82 percent.