Shopping centers ask government to extend moratorium on bank loan
BENGALURU: Many of the largest mall operators in India, including DLF, Nexus Malls and Phoenix, gathered on Monday under the umbrella of the Mall of India (SCAI) to urge the RBI and the government to extend the moratorium on the bank payment 9-12 month loans.
All of the shopping malls have been closed since the closing began, and the retailers in those malls are not in a position to pay rent. This in turn makes it difficult for shopping centers to pay. About 85% of a mall's income depends on rentals. Shopping centers, which is the infrastructure of organized retail, are at stake, said Amitabh Taneja, president of SCAI.
“When a shopping center comes into operation, leases with banks are generally discounted. The developer takes financing out of building a bank and then converts it to a lease discount (LRD) that is then paid as an EMI for 8-9 years. With cash flow disrupted, it has now become a challenge, ”said S Raghunandan, commercial president of the city of Bhartiya.
LRD is a financing mechanism under which a term loan is offered against rental receipts derived from leases with corporate tenants.
SCAI wants banks to extend the repayment period so that loans are not classified as NPA. It has also urged immediate attention towards the granting of GST refunds to compensate for losses on account and for the closing period of the business. It has also urged the provision of short-term financing for a period of 6 to 12 months to meet the highest job requirements.
The Association has also called for providing a short-term financing option for a period of 6 to 12 months, at lower interest rates to meet the highest working capital requirements. “For a shopping center, the key income is rent, which has to bear both the payment of the debt and the payment of the employees and other fixed costs. Therefore, it is imperative that we receive the rentals on time, said Dalip Sehgal, CEO of Blackstone-owned Nexus Malls.