Delhi firm says it’s unable to pay Rs 3,700 cr; willing to shell out penalty of Rs 130 crore.
BPTP Group, the real estate developer, which created a sensation last year by signing the most expensive land deal in the country at Rs 5,000 crore, has backed out of the deal citing unavailability of funds.
The Delhi-based privately-held firm has asked the Noida Authority to cancel its 94-acre commercial project signed in March 2008 and is willing to pay penalty of Rs 130 crore to forgo the contract.
BPTP has already deposited Rs 1,300 crore, or 25% of the Rs 5,000 crore, with the authorities as the first instalment. The company said it is not in a financial position to pay rest of the 75%.
BPTP had outbid India’s largest realtor DLF and Omaxe to bag the most expensive land deal in the country.
At that time, BPTP director, Sudhanshu Tripathi, told DNA that they had decided the bid amount well before in advance and it was not a “knee-jerk reaction” to compete with other bidders such as DLF.
Meanwhile, people familiar with the development said that Noida Authority now has to significantly scale back the plot price in the range of Rs 2,500-3,000 crore for other developers to even consider going for any second auction.
“No body is even going to touch that land at that price, no one is buying land … let’s see how Noida Authority reacts now,” an industry source said on the condition of anonymity.
The Noida Authority will meet on Friday to discuss the application by BPTP and announce its decision on the development.
Meanwhile, a few weeks back, the Uttar Pradesh government with its policy to help developers in this slowdown gave them a choice to either get their payment rescheduled or surrender the plot by paying penalty.
However, with no visibility on sourcing funds for rest of Rs 3,700 crore of payment, BPTP has taken the latter route to exit the deal.
The penalty of Rs 130 crore would be taken out from the 25% deposit.
Tripathi said in a statement, “Following the UP government policy announcement, BPTP has made an application to the Noida Authority for surrender of plot and is awaiting the decision.”
BPTP is hoping to get about 24% or about 23 acres of land in lieu of the amount it has already deposited, and said it would build commercial offices in that space.
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