Peninsula Land Repays SBI After Rs 2.35 Crore Default
Birds fly around a Regus Plc advertisement for serviced office rentals hanging from a street light outside the Peninsula Corporate Park, developed by Peninsula Land Ltd., in the Lower Parel area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Peninsula Land Repays SBI After Rs 2.35 Crore Default

Mumbai-based developer Peninsula Land Ltd. repaid Rs 2.35 crore to State Bank of India on Thursday, a person privy to the development told BloombergQuint on the condition of anonymity.

On Wednesday, the company told the stock exchanges that it was in default of principal payments worth Rs 88 lakh and interest payments worth Rs 1.47 crore to SBI’s Tara Chambers branch in Pune. This is part of a Rs 177.72-crore secured loan, which is raised at a 9.95 percent interest for 143 months.

The money was borrowed under a lease rental discounting system, where the developer repays the loans from the rent it receives from tenants who occupy the building. In this particular case, the building is Piramal Chambers in Parel, Mumbai, which is occupied by the income tax department.

According to the person quoted earlier, Peninsula Land is awaiting rent from the central government for the building, owing to which the loan amount was in default. For now, the company has made the repayments through its own cash flow.

Peninsula Land had to make the disclosure on the stock exchanges, owing to the Securities and Exchanges Board of India’s November 2019 guidelines, which require listed companies to inform stock exchanges if they have been in default for more than 30 days.

The developer owes Rs 999.74 crore worth outstanding loans to banks and financial institutions. Its total borrowings stood at Rs 1,630.65 crore as on Sept. 30.

The company has been facing financial difficulties for some time now. At the end of the second quarter, the company reported a net loss of Rs 220.10 crore. Revenue from operations rose to Rs 10 crore as on Sept. 30 from Rs 6 crore a year ago. Other income dropped to Rs 19.4 crore from Rs 21.38 crore in the year-ago period.

On Dec. 16, rating agency ICRA Ltd. released a note saying that Peninsula Land was not cooperating, as it did not submit a “no dues certificate”. The long-term rating for the company stays at C, according to the rating agency.

On Thursday, Peninsula Land shares fell 4.94 percent to Rs 3.85 apiece on the NSE while the benchmark Nifty 50 gained 0.82 percent to end the day at 12,282.20 points.

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