Lenders to the insolvent Jaypee Infratech (JIL) on Monday deliberated upon the bids submitted by two eligible contenders – NBCC and Suraksha Realty – but stopped short of making a decision. The committee of creditors (CoC) would meet again by the end of this month to negotiate further with the bidders, sources present in Monday’s meeting said.
Both the bidders made their presentations before the CoC and highlighted key points of their resolution plans for the revival of the stressed company. After further clarifications and negotiations, NBCC and Suraksha could be asked to submit final plans. Voting on the bids will happen soon after.
Over 23,000 home buyers, who enjoy the status of financial creditors under the insolvency law, and 13 banks have voting rights in the CoC. The home buyers have nearly 60% shares. For the bid to be approved, 66% votes are required under the Insolvency and Bankruptcy Code. The admitted financial claim of the financial creditors, including banks and homebuyers, is around Rs 23,723 crore. Operational creditors have submitted claims of Rs 9,712 crore with the insolvency resolution professional.
In the revised bids, NBCC has said it will deliver flats to homebuyers in four years. It has also offered lenders 1,426 acres of existing land (owned by the insolvent JIL) worth Rs 5,000 crore. On top of these, NBCC has said it will offer lenders 75% of the 858 acres of mortgaged land of JIL and 50% of the sale proceeds of about 3,000 Benami or unclaimed flats and the Yamuna Expressway.
Suraksha Realty, which submitted bids along with Lakshdeep Investments and Finance, has offered lenders 1,934 acres of land (which includes the land owned by JIL as well as the mortgaged land) worth Rs 7,857 crore. It proposed to bring in Rs 2,000 crore as working capital to complete construction in the next three years, but wanted to retain the Yamuna Expressway with itself. Among its other offers, it has proposed to complete flats in the next three years.
The Supreme Court had on November 6 gave a 90-day window to complete JIL’s corporate insolvency resolution process (CIRP) and restrained JIL’s resolution professional Anuj Jain from entertaining any other bid “individually or jointly or in concert with any other person” for the company.
Of the 90 days, the first 45 days are for the RP to invite revised plans from NBCC and Suraksha and place the plan(s) before the CoC, if required, and submit the approved bid to the adjudicating authority (NCLT). The last 45 days, commencing from December 21, margin has been provided for removing any difficulty and to pass appropriate orders thereon for the adjudicating authority.
JIL’s CIRP was initiated on a plea by IDBI Bank in August, 2017. Since then lenders to the company have disapproved the highest bids twice. In the first round, held in May 2018, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
Later in October 2018, the IRP started the second round of bidding process. In the second round of bidding, held in June this year, the CoC had first rejected the resolution plan of Suraksha Realty and then voted against state-owned NBCC’s offer.
Source: Financial Express, November 19, 2019