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Fairmont Apartments by VGN Guindy, Chennai

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Fairmont Apartments by VGN Guindy, Chennai

Last updated: October 31 2019
325 | Posts
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  • Re : Fairmont Apartments by VGN Guindy, Chennai

    I spoke to the sales team.

    Phase 1 and 2 will be done first.

    Other 3 phases will be later. That means construction work within the complex will go on for the next 3 to 5 years after hand over of phase 1 and 2

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    • Re : Fairmont Apartments by VGN Guindy, Chennai

      Phase 1 and 2 sold out...
      Now phase 3 at 7599 psft

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      • Re : Fairmont Apartments by VGN Guindy, Chennai

        Looks booking in this project is an already profitable one :-)

        Shows how far pricing can play a role, Still lot of demand in Chennai by the looks of it

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        • Re : Fairmont Apartments by VGN Guindy, Chennai

          Will be interesting to find out how many of the 'sold out' apartments are actually allocated to bankers. I heard some banks colluded in awarding this land to VGN and that the bidding for this land of HTL was not conducted in a fair manner. Kickbacks will surely be in form of apartments in this prime location.

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          • Re : Fairmont Apartments by VGN Guindy, Chennai

            Originally posted by subramania View Post
            Phase 1 and 2 sold out...
            Now phase 3 at 7599 psft
            The game is on.

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            • Re : Fairmont Apartments by VGN Guindy, Chennai

              Must Read for everyone who is considering this project: Link

              Read the pg. No 17 (PDF numbering).

              As of FY 2013-14, VGN is paying 93% of its EBIT (pre-tax earnings) in interest.

              Total Debt of the Co:

              FY 2011-12: 4.86 Cr
              FY 2012-13: 262 cr
              FY 2013-14: 519 cr.
              FY 2014-15: 800-900 cr [ My guestimate including this debt offering of 330+70 cr]

              Networth of the Co as reported : 80-90 crores

              Debt - Equity ratio (after the issue) would have swelled to ~10 times. These are tell-tale sign of Co drowning in debt.

              Look at Pg No 31 (PDF numbering) - list of defaults in interest to Piramal 8 times in late 2014. Now, you figure why they went for an another debt offering in Jan 2015..otherwise, this Co would have been in perennial default.

              It gets more interesting when you read the purpose of this debt offering (Feb 2015):
              1. To repay the earlier debt raised to the tune of 280 crore in 2013. [That is gall!]
              2. To fund the Fairmont construction and promotion [Business as usual amid all the debt galore!]
              3. Maintenance of debt servicing reserve [ On the edge!]

              All of the above is the state of this co as of FY 2013-14 and 19 months have passed since then. For a Co this neck deep in debt, 19 months is a generation of time because interest payment is drowning them.

              VGN could not service the debt of 280 crores and defaulted in interest payment going for another 400 crore.

              Enough alarm bell should start ringing.

              If we ever get hold of the FY2014-15 numbers or latest balance sheet of VGN, it could have been the halloween trick or treat scare subject !!.
              Last edited November 4 2015, 08:37 AM.

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              • Re : Fairmont Apartments by VGN Guindy, Chennai

                In the back drop of #167, I find the below quote in one of the earlier posts completely misplaced in the understanding of the rights when one makes a booking for an apartment.

                Originally posted by ambalam
                The higher debt level is concern certain extend - but I'm not investing in VGN equity - I will be safe as long as the company remains solvent.
                Booking amount is the receivable for the Co. Till you take the possession, all of your payments (including the 50% in 90 days) will be receivables with 'no rights on any of VGN assets including Fairmont'. This is the reason why when you buy an apartment in launch or construction stage, financial soundness of the firm is a key evaluating parameter which precedes everything including the price.

                You have no lien attached whatsoever for the amount.

                Look at the tight shackles every lender is tying the assets of VGN with. Interest coverage ratio at 93% and debt-equity ratio at ~9, you will not be left with any assets and there will be many ahead of you, when solvency issues crop up.

                You have no rights of recourse with assets identified and you are at the discretion of VGN when it comes to paying back and after everyone else with the secured loan takes what is due for them.

                As of 2013-14 numbers, their networth is 6 month worth of interest payment on the debt they have - it will evaporate sooner than you can blink the eye.

                Originally posted by ambalam
                I will be safe as long as the company remains solvent
                Extremely hopeful statement and wishful thinking which is borne out of not knowing the financials. Must read the link I posted.

                In my view, '50% in 90 days' is the proxy debt offering of VGN which is completely free from any lien, interest payments, strict covenants, disclosures. They made the price very attractive because they need this money. They would not have had it so easy with earlier NCDs they private placed. Just think: When the location is good and in the heart of the city, which can sell itself, why would any seller undersell?

                If you did not know, the tagline of the VGN brand has changed (by me, of course) as follows:

                VGN - Mortgaging assets since 2013
                Last edited November 4 2015, 08:54 AM.

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                • Re : Fairmont Apartments by VGN Guindy, Chennai

                  Just wondering how a company with so much of debt is allowed to take money from public for a product which will be made and delivered in future. Why no govt regulations/ guidelines/ restrictions for a company to rise money from public.?

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                  • Re : Fairmont Apartments by VGN Guindy, Chennai

                    Since the project is CMDA approved, what is the FSI used for this project?

                    Or do they share the UDS for each apartment size when you book?

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                    • Re : Fairmont Apartments by VGN Guindy, Chennai

                      For 634 sq.ft Saleable Area

                      139 sq.ft is UDS

                      Carpet Area is just 475 sq.ft
                      Last edited November 4 2015, 02:58 PM. Reason: Text formatting.

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