Dhirendra Tripathi Moneycontrol News
Jaypee Infratech promoter Manoj Gaur today came out to address thousands of angry buyers of the company's unfinished properties.
The buyers, numbering anywhere between 5,000 and 10,000 have been camping outside the company's Sector 128 Noida office since this morning. Most of the buyers want refund of their money.
“Your money won’t go anywhere, I will not be able to sleep till I deliver your house,” Gaur told the irate buyers amidst police bandobast.
Gaur was accompanied by insolvency resolution professional Anuj Jain from BSSR and Co. and officials of IDBI Bank.
The Allahabad bench of the National Company Law Tribunal (NCLT) on Wednesday accepted lender IDBI Bank’s plea and admitted Jaypee as a case for insolvency resolution.
Anuj Jain, the insolvency professional, will sit with Jaypee’s creditors now to see if a resolution of the company’s debt is possible. He has 270 days to do this. The company's board will remain suspended in this period.
The buyers in properties of various under-construction projects of Jaypee fear loss of their money on the likelihood of the company being liquidated.
Jaypee officials say that the company is in talks for a Rs 1,000-crore credit line from a bank and this would help the company continue construction of its various projects.
As on March 31, 2017, Jaypee Infratech had borrowings of Rs 8,365 crores and an interest service coverage ratio of less than zero, implying an inability to service its debt.
The admission of IDBI Bank’s plea in NCLT is a big setback to thousands of buyers of various properties that were being set up by Jaypee in Noida, Greater Noida and elsewhere. Under the current circumstances, the secured lenders of Jaypee will have the first right to the company’s assets.
In case the lenders are unwilling to convert their debt into equity, there will be no option but to liquidate the company, leaving the buyers of the company’s under-construction properties with little choice.
The buyers have filed cases against the company at various consumer courts in the country.
The projects, already delayed by four years, include Kensington Boulevard, Aman, Kassia, Kalypso, Klassic, Krescent and Cosmos.
Jaypee Infratech had proposed to build 32,000 flats, excluding some plot properties, across various projects in the Wish Town city spread across 5 sectors in Noida along the Yamuna Expressway. Flats, penthouses, villas and plots were all part of these projects.
Jaiprakash Associates, the flagship company of the Manoj Gaur-owned group, has 71.64% stake in Jaypee Infratech. Jaypee Infratech is one of the 12 companies that were referred to the NCLT by the Reserve Bank of India for admission under the insolvency code.
Besides Jaypee, the list of 12 defaulters includes Monnet Ispat, Jyoti Structures, Electrosteel Steels, Amtek Auto, Essar Steel, Bhushan Steel, Bhushan Power and Steel, Jaypee Infratech, Lanco Infratech, ABG Shipyard, Alok Industries and Era Infra & Engineering.
There are seven accounting firms mandated to nominate officials who will oversee the debt resolution exercise at these companies. The firms are PwC, Deloitte, KPMG, EY, BDO, Grant Thornton and A&M.
Jaypee’s Wish Town is one of the five integrated townships that the company planned to build over 25 million square meters of land. The development plan included commercial, amusement, industrial, institutional and residential purposes across the five locations—one in Noida, two in district Gautam Budh Nagar and one each in Aligarh.
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