New Document top_band
 
Business Standard

Sobha drags HSBC to court over debt restructuring package

Related News

, the publicly-held Bangalore-based real estate developer, has gone to Court against over restructuring of its debt. In the Suit, Sobha Developers has averred that HSBC went back on its commitments of lower interest rates and waving off the processing and foreclosure fee on a . According to Sobha Developers, HSBC has breached contract terms, breached , breached normal banking practices.

As per legal Suit filed, which has been reviewed by Business Standard, Sobha Developers during the year 2008 and 2009 approached HSBC for restructuring loans amounting to a little over Rs 170 crore, with interest rates ranging between 14-20 per cent for the restructured loan and which was backed by adequate collaterals. Sobha Developers, in its legal suit against HSBC has said that the bank went on to charge 35 per cent as part of the restructuring package, which is against the RBI regulations. During 2008-09, the entire real estate industry was under severe stress from the global slowdown and RBI has given specific guidelines to banks on how to treat the which has been affected in the economic meltdown and HSBC has acted against those norms. HSBC India declined comment for this article.

In the legal suit, Sobha Developers also averred that, HSBC, taking advantage of the conditions in which Sobha Developers was placed — particularly on the promise to purchasers to deliver title deeds free from all encumbrances, imposed unilateral terms and conditions which were against the guidelines issued by the Reserve Bank of India for restructuring the credit limits extended to the real estate business and demanded the refund of a little over Rs 6 crore.

Sobha Developers, ever since the downturn, has been aggressively addressing the high leverage issue by going in for a (Qualified Institutional Placement) and then sold part of the land bank. The gearing, which as high as 1.7 times during the downturn, is now at 0.65 times. On the sales front too, Sobha Developers has been able to make a good turnaround and is looking at touching sales of Rs 2,000 crore for FY13 compared to Rs 1,500 crore during FY12. Sales realisation during the first quarter was up 26 per cent on a YoY basis, while the sales volume has gone up 25 per cent.

Read more on:   
|
|
|
|
|
|

Read More

Jaguar launches XKR special edition at Rs 1.27 cr

Tata Motors-owned Jaguar today said it has launched the XKR special edition luxury sedan in India, priced at Rs 1.27 crore (ex-showroom, Delhi).

Quick Links

Advertisement

Back to Top