The NCLT appointed insolvency resolution professional Anuj Jain has received 18 bids from investors willing to pump in at least Rs 2000 crore to complete the projected floated by Jaypee Infratech.
The National Company Law Tribunal (NCLT) appointed insolvency resolution professional (IRP) Anuj Jain has received 18 bids from investors willing to pump in at least Rs 2000 crore to complete the projected floated by Jaypee Infratech that involves nearly 32,000 apartments, plots and villas.
Among the parties who have expressed interest include Vedanta Group, Essel Highways, Lodha Group, L&T, Cube Highways from Singapore, Kotak Infra, SARE Group, Deutsche Bank, Asset Reconstruction Company (India) Limited, Suraksha Realty, Tata Realty and JSW, sources told Moneycontrol.
Sajjan Jindal-promoted JSW has also evinced interest to acquire a 30 percent stake in Jaypee Associates, the parent company and jointly bid to invest in the embattled Jaypee Infratech that is facing insolvency proceedings, sources said. It should be noted that JSW Energy acquired two hydel power plans from Jaypee Group in 2015.
The names of the bidders were formally announced at a committee of creditors meeting held this evening. The IRP had invited expression of interest (EOI) from parties interested in submitting a plan for resolution of Jaypee Infratech Limited (JIL) in accordance with the provisions of the Insolvency and Bankruptcy Code 2016 by November 7, 2017.
The next steps include the IRP entering into a dialogue with each of these companies and begin the process of negotiations followed by receipt of non-binding bids and binding bids etc. The process may take at least six to eight weeks, sources said.
According to them, it is a win-win for homebuyers as sooner an investor is finalized, the faster money can be infused to accelerate construction.
The IRP is also expected to inform the Supreme Court about the bidders when it meets to hear the case on November 13. Earlier this week, the Supreme Court, which is hearing a plea of homebuyers of Jaypee Wish Town project in Noida in Uttar Pradesh who are challenging the insolvency proceedings initiated against Jaypee Infratech, had pulled up Jaiprakash Associates (JAL) for seeking more time to deposit Rs 2000 crore with the registry and disallowed their application and said they should deposit a sizeable amount such as Rs 1000 crore by November 13 to show their bonafide before asking for an extension.
While inviting the bids a few weeks ago (October 28), the IRP had set the following criteria for applicants - companies, investment firms and fund houses with a net worth of over Rs 1,000 crore to complete the developer’s delayed projects, including Noida’s Wish Town, by infusing Rs 2,000 crore or more.
# The party to be shortlisted for submitting a plan should be a body corporate with a minimum net worth of Rs 1000 crore (share capital and free reserves) as on March 31, 2017 (at Group level).
# For investment companies/fund houses, minimum assets under management (or committed funds available) should be Rs 1000 crore or more.
# The party must have the commitment to satisfy the mandatory requirements of resolution plan and its regulations, the timelines, the process for resolution provided under the IBC, it said.# The body corporate should also have the ability to execute real estate projects either directly or through joint ventures, contractors etc through a resolution plan to be sanctioned under IBC and it should have the ability to invest Rs 2000 crore or more to complete the construction of the flats.
It should have good financial health and repute and should protect the interests of homebuyers generally, and in particular by timely construction and possession of flats, it said.
# It should also declare if the party is related to JIL.
Also, this week, while amending the regulations in the Insolvency Code, a compromise formula was reached. It was decided that the promoter against whose company the insolvency proceedings have been initiated should be allowed to participate in the bidding process.
“It should be seen purely as a commercial issue. It is up to the lenders of the said company to take a call on whether the promoter should be allowed to participate in the bid invited by the IRP in case there is a trust deficit or there has been inefficient management of the assets in question. The COC will have to take into account the credentials of the promoter, do a background check etc while deciding whether to accept his bid or not as the law does not debar a promoter from not taking part in the bid,” legal experts said.
Are homebuyers happy with the news? "Receipt of 18 EOIs clearly shows how great this housing project was, that got ruined at the hands of the Jaypee Group. Jaypee Group could not complete the construction in the last one decade and there is no reason for the home buyers to believe that it will keep its promise now, even if Jaypee Group tries to throw JSW in the mix. Further, the recent amendments to the IBC Regulations discourage resolution plan proposed by related parties and promoters with poor credentials. Therefore, the resolution professional and the committee of creditors will have to review the books for any fraudulent, undervalued or preferential transactions between JAL and JIL before accepting any resolution plan proposed by JAL,” says Abhishek Dubey, insolvency a Delhi-based corporate lawyer and also a Jaypee flat buyer.Vandana.firstname.lastname@example.org