Noida takes Rs 300 crore haircut, allows Max’s resolution plan for Delhi One project

Aditya Dev / TNN / Updated: Aug 14, 2024, 11:12 IST

NOIDA: Noida Authority has taken a Rs 300 crore haircut and accepted a resolution plan by Max Estates to clear dues worth Rs 613 crore so that it can resume construction of the Delhi One commercial project off DND Flyway in Sector 16B.

The Authority has also granted Max three years’ extension to complete the project, following which it will impose a penalty in case of a delay.

Launched originally by Boulevard Projects – an SPV owned by promoters of Three C Group – Delhi One was acquired by Max Estates through insolvency proceedings in the National Company Law Tribunal (NCLT) in Feb last year.

The tribunal had, however, allowed Max to pay Rs 325.5 crore, which was just about 35% of the Rs 932 crore that the Authority had claimed in dues from the project.

The Authority then challenged this reduction in dues at the National Company Law Appellate Tribunal (NCLAT), which asked Max to come up with a revised resolution plan.

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Max submitted its representation before the Authority twice – on March 14 and 22 last year. But there was no action from Noida.

Subsequently, Max filed a revision petition under Section 41 (3) of the UP Urban Planning and Development Act, 1973. On June 3 this year, it secured an order from the state govt, allowing the company to present its offer before the Authority board.

Max did so on June 12 this year, saying the Authority’s claimed amount of Rs 932 crore would reduce to Rs 775 crore if time extension charges, penal interest, compounding charge and rent were waived. The developer also sought a zero-period waiver on interest incurred when there was an NGT ban on constructions around Okhla Bird Sanctuary, claiming it would further reduce the amount to Rs 542 crore.

“The Authority board accepted Max Estates’ proposal of Rs 542 crore after hearing all representations. The amount that the company will have to pay over the next three years will, however, come to Rs 613 crore, including interest at SBI’s MCLR rate. But it must pay 25% of this amount upfront. Max won’t be charged any time-extension fee for three years. Beyond that, the developer will have to pay in keeping with the rules. It will, however, continue to pay lease rent according to the terms,” said Lokesh M, the Authority CEO.

In its revised plan, Max has sought certain waivers and reliefs. It has urged that its revised layout for Boulevard Towers be approved without any delay and any violations under Noida Building Regulations, 2010, be waived.

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Initially, the Delhi One project included one commercial tower, a hotel, retail spaces, and three residential buildings. However, according to Max’s resolution plan, the existing residential customers will be consolidated into service Tower 1 and while the remaining two housing buildings will be converted into commercial space, thus reducing the market risk associated with unsold inventory.

The proposed hotel will also become office space now, while the commercial tower will stay as is.

Max Estates has proposed to re-allocate retail customers into the converted commercial spaces, offering them approximately 1.4 times their original retail area on a super area basis. The construction of various project components is expected to be completed in 22 to 42 months.