21 bids received for completion of Jaypee Infratech residential projects in Noida

The National Company Law Tribunal (NCLT) appointed resolution professional (IRP) Anuj Jain has received 21 bids from investors willing to pump in at least Rs 2,000 crore to complete the projects floated by Jaypee Infratech that involves nearly 32,000 apartments, plots and villas.

The new entrants post the ordinance promulgated last week that bars promoters of companies that have been non-performing assets (NPAs) for over a year from submitting their bids for the resolution process include the high profile companies such as Adani Group, Hindujas and Sajjan Jindal’s JSW Group.

Among the parties that had expressed interest earlier included Vedanta Group, Essel Highways, IDFC, Lodha Group, Puravankara, SARE Homes, L&T Infra, Cube Highways from Singapore, Kotak Infra, SARE Group, Deutsche Bank, Asset Reconstruction Company (India) Limited, Suraksha Realty, Tata Realty, National Infrastructure Investment Fund (NIIF) and JSW among others, sources told Moneycontrol.

Sajjan Jindal-promoted JSW had earlier 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. It should be noted that JSW Energy had acquired two hydel power plans from Jaypee Group in 2015.

Sources said both the Adani Group and the Hindujas have now submitted their expression of interest. Last week, the government had promulgated an Ordinance amending the Insolvency and Banking Code that bars promoters of companies which have defaulted for over a year from bidding for the assets being sold by the banks to reclaim their dues. What this means is that Jaypee Group, the promoter, in this case, is out of the race as it has now been made ineligible to submit bids under the 180-day resolution process.

The fresh bids come at a time when the resolution professional is preparing an information memorandum in the run-up to the bidding process. Credentials of all bidders are also being checked to ensure that they do not attract provisions of the ordinance, which will make them ineligible.

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.

“Hereon, the resolution professional will be asking all interested parties who are eligible as per the Ordinance to declare and certify that they are eligible to submit a plan for resolution of the Jaypee Infratech Limited,” sources said.

Once the declaration comes in, the resolution professional will get back to the “eligible companies” in the next four to five days and share the final process notes with them. “That will indicate the process to be followed or articulated going forward and the timelines to be met,” they said.

These companies will then be called upon to submit their detailed resolution plan, how they propose to restructure the company, etc., sources said.

“We are aiming the first week of January to have an indication of how many companies will finally stay on through the entire process and get clarity on how many will fall out. We will also know by then as to how many companies are interested in all assets of the company facing insolvency proceedings or only part of it,” they said.

It has been reported that while several of the companies are looking at all the assets of Jaypee Infratech, there are some which are interested either in the real estate project or the Taj Expressway.

The names of 18 bidders were formally announced at a committee of creditors meeting held last month. 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.

Experts say that the entire process is a win-win for homebuyers as sooner an investor is finalised, the faster money can be infused to accelerate construction.

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 1,000 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 1,000 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.

On November 22, in what seems to be a temporary relief to the troubled promoters of Jaiprakash Associates (JAL), the Supreme Court allowed the parent company of Jaypee Infratech Ltd to deposit Rs 275 crore immediately and another Rs 275 crore by December 31. This is against the earlier order asking the promoters to deposit Rs 2000 crore by November 13 which the promoters were unable to meet even though four deadlines had expired. No specific timeline was given to deposit the remaining Rs 1450 crore.

The court also restrained the company’s independent directors, promoters and immediate family from selling their assets to raise money before the said amount had been deposited, saying that such a move "will not only be liable for criminal prosecution but contempt of the court", the order said.It also directed that the matter be heard on January 10 and that none of the promoter directors and the independent directors should alienate their personal assets.

The court appointed advocate Pavanshree Agrawal as amicus curiae and asked him to prepare a portal carrying all the details of the flat buyers, those seeking a refund of their money and other details of Jaypee Infratech.

The process going forward:

# Bidders will now sign confidentiality agreements with the resolution professional

# IRP will share basic information about JP Infra accounts and business

# Based on that info – these bidders will submit non-binding bids

# Based on the bid values, IRP will invite a select few to submit binding detailed bids

# These binding bids will be then presented to the creditors

# Creditors will negotiate with them, individually and together

# Creditors will have to agree to a plan which is in the best interest of all stakeholders  including buyers

# Bids can be received together and separately for three main assets in the portfolio – hospitals and hospitality, Yamuna Expressway, and real estate

# If the sum of parts is greater than whole, assets can be sold separately as well.

# All final bids have to be before the creditors by February 10, 2018.

vandana.ramnani@nw18.com