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Seek higher bids for Jaypee Infratech: IIFC tells co-lender IDBI

According to a conservative estimate, the value of the company’s assets should not be less than Rs 20,277 crore.

Dhirendra Tripathi @dtrips
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India Infrastructure Finance Company Ltd, the second largest lender to the beleaguered Jaypee Infratech, is said to be unhappy with the bids received for the Yamuna Expressway owner and has conveyed the same to IDBI Bank, the largest creditor to the company, according to a source aware of the development. The Gaur family-promoted company owes the lenders Rs. 9,100 crore and figured as one of the twelve companies in the central bank’s first list of defaulters.

“The bids are much lower than the actual value of the assets. They are also much lower than what the company was offering to the creditors. IIFL has told IDBI of its displeasure over the bids and wants them to be higher,” the official said.

The race is now down to two bidders -- Lakshadweep Pvt Ltd and the Adani Group -- with the former in the front seat. Lakshadweep is a joint venture between Sudhir Valia-led Suraksha Asset Reconstruction Company and Mumbai-based Dosti Reality. Valia is the brother-in-law of Shanghvi and an executive director on the board of his company, Sun Pharmaceutical Industries. Dosti Realty is a real estate company promoted by Shanghvi’s cousin Deepak Goradia.

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According to a conservative estimate, the value of the company’s assets should not be less than Rs 20,277 crore. This is derived from the hospital being worth Rs. 500 crore, 167-km Yamuna Expressway Rs. 3,500 crore, 900-acre land parcel near Formula-1 track at the circle rate of Rs 7 crore per acre, 1,225 acres in Jewar at circle rate of Rs 3.34 crore per acre, 1,185 acres near Agra at circle rate of Rs 3.28 acres per acre and 10 million square feet FSI at Noida at Rs 2,000 per square feet.

“JP is clearly being undervalued by all the bidders so far. The value of the assets is much higher. Also, land and property rates have already started firming up in the Noida-Greater Noida area owing to the proposed international airport at Jewar. In this period, JP has also continued to deliver the flats to the buyers, clearly showing its intent to stay in the game,” another official told Moneycontrol.

As per Lakshadweep’s Rs 7,350 crore offer, it will make an upfront payment of Rs 1,200 crore to the banks. It has marked Rs 4,000 crore against the sale of land and another Rs 2,000 crore to be converted into long-term non-convertible debentures. A small equity stake may also be offered to the lenders.

Adani Group has offered Rs 1,200 crore in cash, Rs 3,500 crore of land parcel and Rs 3,000 crore of back-dated instruments.

Jaypee Infratech’s offer included this: 10 percent per annum interest on Rs 3,140 crore of sustainable debt and giving away 448 acres against Rs 2,340 crore of debt as well as an issuance of optionally convertible debentures and conversion of debt into equity.

Jaypee parent Jaiprakash Associates’ Executive Chairman and Chief Executive Officer Manoj Gaur had earlier said that Jaypee was close to clinching the deal with the lenders in 2016 but the RBI directive on NPAs spoilt its case. Jaypee’s offer still remains the best and the Supreme Court has left it to the Committee of Creditors, a consortium of the company’s lenders, to decide its fate.
First Published on Apr 17, 2018 09:45 am
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