Bids for Jaypee Infratech: It could be the Adani way on the Yamuna Expressway

The final word on the resolution of the problems facing Jaypee Infratech isn’t out yet but details emerging from Wednesday’s meeting of committee of creditors seem to indicate that Adani Group could be entrusted with the task of completing the unfinished flats of the realty company besides ensuring that lenders face minimum haircut.

The bidders had to submit revised bids by Wednesday and also make presentations to the committee of creditors. Sources told Moneycontrol that going by the fresh bids and the interaction between the suitors and the lenders, the Ahmedabad-based group had nosed ahead of the other three contenders — a joint venture (JV) of Singapore’s Cube Highways and Kotak Realty Fund, Sajjan Jindal’s JSW Group and Lakshdeep Investments which is part of Sudhir Walia’s Suraksha Asset Reconstruction Company.

The successful bidder will displace Jaiprakash Associates as the parent of Jaypee Infratech. As its promoter, the bidder would have to hand over completed properties to the buyers while settling dues with the banks on mutually agreed terms. It will also come to own the Yamuna Expressway and the Jaypee Hospital.

Adani Group is offering about Rs 2,500 crore-Rs 3,000 crore to the lenders and Rs 1,500 crore to finish the completion of the under-construction properties, an offer the creditors seem amenable to.

Sources said the Cube-Kotak bid was most suitable for the home buyers — around 21,000 of them — but one of the factors that seems to have tilted the scales in favour of the Gautam Adani Group is a submission by the Cube-Kotak JV that post the deal, Cube would take control of the 167-km-long Yamuna Expressway while Kotak would take control of the land lying with Jaypee.

Cube-Kotak JV offered to put Rs 4,500 crore in an escrow account to help complete the unfinished flats and villas. The Cube-Kotak JV is also offering a land swap against the Rs 9,100-crore debt that Jaypee owes to the banks, something banks won’t be inclined to accept — cash repayment being the preferred choice for any bank.

One of the sources said Cube-Kotak was no more in contention as “the creditors found its bid to be complicated”. The race is now among the other three, he said.

“The demerger into expressway and the real estate proposed in the Cube-Kotak bid is not part of the terms of the agreement. So it is unlikely the banks would accept that kind of an offer,” an official familiar with the development told Moneycontrol.

Jaypee Infratech owns 3,700-3,800 acres in Noida with another 858 acres under dispute. The insolvency resolution professional, running the company since August 2017, had earlier informed the Allahabad Bench of the National Company Law Tribunal (NCLT) that Jaypee Infratech’s parent Jaiprakash Associates and its promoters had coerced the company into mortgaging 850 acres of land to the lenders of Jaiprakash Associates.

The Jaiprakash subsidiary also owns Jaypee Hospital, a super specialty unit.

Once the final evaluation is done, the creditors will select the most suitable buyer for Jaypee Infratech. Following this, the insolvency resolution professional will move the NCLT to inform it of the decision.

This will then relieve Jaiprakash Associates from all encumbrances including the case against it at the Supreme Court as the promoter of Jaypee Infratech.