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Jaypee case: NCLT Allahabad allows Jaypee Infra resolution process to go on until next date of hearing

The NBCC bid is likely to be discussed at the May 9 meeting, sources told Moneycontrol.

Vandana Ramnani @vandanaramnani1
 
 
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The Allahabad bench of National Company Law Tribunal on May 6 directed that the corporate insolvency resolution process in the Jaypee Infratech matter continue until May 21, the next date of hearing, sources said.

Jaypee Infratech's lead lender IDBI had approached the NCLT on April 29, seeking extension of insolvency proceedings beyond the 270-day deadline (that ended on May 6) as the process is still underway to find a buyer for the realty firm.

IDBI had also requested the tribunal to deduct the litigation period at several judicial forums, which includes the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court. IDBI's plea is supported by the representative of the home buyers, who are financial creditors under IBC. The NCLT had on April 29 fixed May 6 for the next hearing.

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"IDBI had asked for exclusion of certain period for counting the 270-day period. The matter was listed today and the court has now posted the matter to May 21. In the interim, it has allowed the CIRP process in the Jaypee matter to go on. The NBCC bid is likely to be discussed at the May 9 meeting," sources told Moneycontrol.

The creditors of Jaypee Infratech are expected to meet on May 9 to discuss the bid of state-owned NBCC Ltd to acquire Jaypee Infratech. The meeting was called after creditors on May 3 rejected the bid of Mumbai-based Suraksha Realty group, which was the only contender after NBCC's offer was rejected in absence of approvals from the government departments. NBCC received the approvals from authorities last Tuesday.

On January 28 this year, the NCLT had extended the period of the CIRP by another 90 days as 180 days mandated under the Insolvency and Bankruptcy Code (IBC) were to come to an end on February 5, 2019.

Under the IBC, a resolution process has to be completed under 180 days with a further extension of 90 days to 270 days. If the company fails to complete the CIRP within the mandated 270 days, then the company goes for liquidation.

On May 3, Suraksha Realty's bid for the embattled company Jaypee Infratech got rejected the second time round. Under the insolvency proceedings, 41.85 per cent of the total votes of the committee of creditors (CoC) was against the proposal, while 23.47 per cent was in favour. Most of those voting in favour of Suraksha were homebuyers, who hold about 60 per cent of the voting rights in the CoCAs much as 66 per cent votes is required for acceptance of a proposal.

As many as 22.46 percent (8019) homebuyers voted for Suraksha, 2.19 percent dissented (860) and 34.62 percent abstained (14,632) from e-voting process, which started on April 30 and concluded on May 3.

Confusion over whether NBCC's bid would be put to vote or not after it received all requisite approvals was perhaps the main reason why Suraksha Realty’s bid for the embattled company Jaypee Infratech was unable to garner sufficient votes from homebuyers who abstained in large numbers, besides of course the fact that its offer was low on upfront cash payment, experts said.

Mumbai-based Suraksha was the lone contender in the race to acquire Jaypee Infratech after the CoC rejected the bid of state-owned NBCC Ltd on the grounds that the offer did not have approval from various government departments.

Suraksha Realty Ltd had in this round offered lenders Rs 18.55 crore as upfront payment and land parcels worth Rs 5,000 crore to settle the debt. It also proposed to infuse Rs 3,000 crore capital to complete construction of over 20,000 flats.

NBCC wants its bid to be reconsidered while Adani Group has also shown interest in acquiring Jaypee Infratech and completing over 20,000 delayed flats in Noida.

Jaypee Group's promoters too have made a formal bid to the IRP, conducted meetings with homebuyers, sent them direct emails and also established a call centre in the last few days.

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, 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 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.

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First Published on May 6, 2019 06:15 pm
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