Orbit Corp stock tanks 9% on being declared as defaulter

Company says it will repay dues in six months

Orbit Corporation’s share price dipped sharply by 9% a day after LIC Housing Finance Ltd sent a notice to Mumbai-based real estate company to recover dues.

The share was trading at to Rs 10.8 per share on the Bombay Stock Exchange.

LIC Housing finance said in view of defaults committed by the borrower (Orbit Corporation) and the guarantors in the payment of installments of principal, interest etc, their account has been classified as non-performing asset (NPAs).  

The amount due is pegged at about Rs 96 crore as at end June 2013.

The loans were secured by the personal guarantees executed by Ravikiran S Aggarwal and Pujit R Aggarwal, directors of the borrowing company.

Ram Yadav, head of finance and strategy at Orbit Corporation in statement said, “the loan was taken in 2008 and you have to pay it in four years. Out of Rs 250 crore, we repaid Rs 96 crore.”

“During previous regulatory regime, all projects got stuck for two years. Out of the around Rs 400 crore project cashflows, Rs 70 crore has to come from a single party (JSW). Once that comes, we will repay the money.”, Yadav said

“We recently got permission for two projects and repaid Rs 4.5 crore and regularised interest payments. Within six months we will repay all the money” he added.