Orbit Corporation sinks 15%, hits 52-week low on loan default

NEW DELHI: Orbit Corporation plunged as much as 14.98 per cent in mid-morning trade on Tuesday to hit its 52-week low of Rs 10.10, as the Mumbai-based real estate developer defaulted on liabilities of Rs 96 crore.

The default includes repayment of loan availed from LIC Housing Finance and the interest on the amount.

The housing finance company has classified the account as a non-performing asset and served a recovery notice to the developer.

At 11:45 a.m.; Orbit Corporation was trading 9.5 per cent lower at Rs 10.75. It has hit a 52-week low of Rs 10.10 and a high of Rs 11.32 in trade today. The stock has plunged over 78 per cent so far in the year 2013, as of data collected on August 5.

Orbit availed a loan of Rs 250 crore from LIC Housing Finance in 2008 and repaid Rs 154 crore until 2010-end, according to the company.

The final payment of the entire loan amount was due in January 2013, ET reported, quoting the company's CFO Ram Yadav.

"The delay in repayment was because two projects - Orbit Grand and Orbit Residency Park, for which the term loan was secured, were stuck in regulatory deadlock since 2011. The deadlock had stalled construction as well as sales and cash flow," he said.