Unitech to raise funds to speed up housing projects

New Delhi: Facing consumer complaints over delay in project completion, realty firm Unitech today said it will raise about Rs 300 crore from financial institutions and sale of land parcels to complete over 40 housing projects comprising 13,000 flats within the next two years.

Unitech said it requires Rs 2,700 crore to complete these 41 pending projects while the receivables from the customers is about Rs 4,000 crore. The company is opening an escrow account for each project to speed up construction work.

Home buyers have filed cases in courts against Unitech for significant delay in execution of housing projects.

"Lately, Unitech, along with the resident welfare associations (RWAs) of projects have worked on a plan to expedite the process at various sites. We have opened escrow accounts with members nominated by RWAs also as signatories," the company spokesperson said.

The RWA members are monitoring the progress of the projects and holding regular meetings, he said.

"In our case, in the pending projects to be delivered, the value of the receivables is in excess of balance construction cost to be incurred. The worker strength on our sites has more than doubled in the last two months itself," the spokesperson said.

"With some additional working capital, which we will be raising either from financial institutions and/or sale of surplus properties, we will be able to expedite construction of projects across the country and deliver the same faster."

The company will be raising about Rs 300 crore for the initial working capital requirement and the remaining construction cost will be met through receivables from customers, the spokesperson said.

The pending projects are largely in Gurgaon, Noida and Greater Noida.

"Recently, the Delhi High Court has passed an order directing the company to open escrow accounts to focus on construction. These accounts will be monitored by the Delhi High Court," the spokesperson said.

In the escrow account, the company will have to keep 100 per cent of customer receivables, which is higher than 70 percent in the real estate regulatory law, the company said.

Unitech had posted a net loss of Rs 902 crore in the last fiscal. Its net debt stood at Rs 7,165.70 crore as on March 31, 2016.