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Jaypee case: NBCC receives approvals from govt departments for revised offer

Financial creditors and home-buyers are presently voting on Suraksha Realty's bid. The voting process started on Wednesday and would conclude on May 3

NBCC, whose bid to acquire Jaypee Infratech got rejected by lenders last week on account of lack of approvals by the administrative authorities, has received the go-ahead from government departments for its revised offer to acquire debt-ridden Jaypee Infratech, sources told Moneycontrol.

They said NBCC has received approvals from the Department of Expenditure and the Department of Investment and Public Asset Management (DIPAM) for its revised offer.

Meanwhile, financial creditors and home-buyers are presently voting on Suraksha Realty's bid. The voting process started on Wednesday and would conclude on May 3.

Voting opened at 9 am on Monday but the website did not respond. Homebuyers’ representative Kuldeep Verma sent out a message to all buyers on Monday that the service provider has communicated that due to system error, the voting portal is currently not responding. IRP team is working with the service provider to resolve this issue at the earliest… The voting line shall be open till 1200 hours on May 3, 2019, the message read.

During the meeting on April 26, NBCC had sought some time to take all the necessary approvals but the lenders decided to put on vote on April 30 the offer of Suraksha Realty-led consortium and not NBCC's.


After the COC meeting, NBCC had also written a letter to the interim resolution professional (IRP) Anuj Jain expressing its interest in taking over the embattled firm and that its offer should be considered on merit.

In its meeting, the committee of creditors (CoC) decided not to consider NBCC's bid as it was subject to approval of various government authorities. NBCC had informed the lenders that day that the company was in process of seeking government approvals and it should be given some time before the voting could be carried out on its plan.

NBCC continues to be very interested in the resolution process and accord the interest of the homebuyers, utmost priority, the letter written by NBCC to the IRP said.

"It is to bring to your attention that during the CoC meeting on 26th April it was clarified by NBCC that these approvals have been applied as expected shortly and it was requested to consider some time frame for allowing NBCC to obtain the approvals before the actual voting on the plan.

“This appeal was made on basis of the fact that the CoC meeting was being held on 26th April, just 2 days after the submission of plan on 24th, and there was not enough time to inform the CoC regarding the status of Govt approvals. We are confident that our proposal will safeguard the interest of the home buyers and the lenders. Therefore, we request the CoC to consider our proposal on merit," the letter written by NBCC to the IRP had said.

On Monday debt-ridden Jaypee Infratech's lead lender IDBI Monday approached the National Company Law Tribunal (NCLT) seeking extension of insolvency proceedings beyond the May 6 deadline as the process is still underway to find a buyer for the Jaypee group's realty firm.

The bank has approached the Allahabad bench of the NCLT court to extend the Corporate Insolvency Resolution Process (CIRP) as the deadline expires on May 6, sources said.

The NCLT has posted the matter on May 6 for the next hearing.

In its previous bid, NBCC had offered 1400 acres of land worth Rs 6000 crore and equity infusion of Rs 500 crore upfront. In the revised bid, it has offered 950 acres of land worth Rs 5001 crore and reduced the equity infusion from  Rs 500 crore to Rs 200 crore, sources said.

For secured financial creditors, it has offered a payment of upfront amount of Rs 1500 crore, 100 percent in Yamuna Expressway SPV, 100 percent in land bank SPV. The land bank SPV is worth Rs 5001 crore and totals 950 acres

Suraksha had earlier offered about Rs 20 crore as upfront payment but in the revised bid, it has proposed an equity infusion of Rs 50 crore and a working capital loan of Rs 3000 crore against a requirement of Rs 2404 crore to complete construction work, sources said, adding their completion timelines are on an average one year less than NBCC.

Business conglomerate Adani Group had also entered the fray by putting in a bid to acquire Jaypee Infratech. Lenders will also have to decide on Friday whether the company would be allowed to enter the race at this stage.

A few day before, promoter of embattled real estate firm Jaypee Infratech Manoj Gaur had once again offered to complete the much-delayed real estate projects within a period of four year by pumping in Rs 1500 crore in an escrow account. Gaur during the meeting with homebuyers claimed that he was a ‘victim of circumstances’, made a presentation and proposed that Rs 1500 crore would be set aside in an escrow account for completion and construction of the projects that are proposed to be completed within four years.

As many as 22,000 homebuyers are stuck because of significant delay in delivery of flats by Jaypee group's debt-ridden firm Jaypee Infratech, which is undergoing insolvency proceedings.

In 2017, the National Company Law Tribunal (NCLT) admitted the application by an IDBI Bank-led consortium seeking resolution of Jaypee Infratech. In the first round of insolvency proceedings, the Rs 7,350 crore bid of Lakshdeep, part of Suraksha group, was rejected by lenders as it was found to be substantially lower than the company's net worth and assets.

In October 2018, the IRP started a fresh initiative to revive Jaypee Infratech on the NCLT's direction.

The realty firm has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI Bank. Other lenders are IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance.

Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 units. JAL had deposited Rs 750 crore in the registry of the Supreme Court for refund to buyers. However, this amount was transferred to the NCLT as per an order of the apex court.
Vandana Ramnani
first published: May 1, 2019 05:07 pm

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