The Committee of Creditors of embattled firm Jaypee Infratech on June 7 sought some clarifications on the revised bids submitted by the government’s construction arm NBCC and Mumbai-based Suraksha Group. The two plans would be taken up for discussion at the next CoC meeting on June 10, Anuj Jain, IRP told Moneycontrol.
He confirmed that Suraksha Group submitted its plan just before the start of the CoC meeting on June 7.
“Suraksha Group submitted its resolution plan almost half an hour before the meeting. We have not gone through it right now but the CoC decided to consider it as well,” Jain said.
“We now meet on Thursday (June 10). By then everyone would have had the chance to go through both the plans and then we will have a discussion on that,” he told Moneycontrol.
“Today’s discussions primarily revolved around whether the Suraksha plan should be considered or not and some clarifications were sought on both the plans (NBCC and Suraksha bids). I will now be doing my compliance tests on the plans and presenting it to the CoC on Thursday (June 10),” he said, adding that his legal team was looking at the two plans.
While NBCC had submitted its revised resolution plan under the insolvency process to acquire debt laden realty firm Jaypee Infratech on June 4, Suraksha Group submitted its bid just before the 23rd meeting of JIL's creditors panel got underway on June 7.
According to sources, Suraksha group had offered more than 2,600 acre land to institutional financial creditors in its last bid submitted on May 18. Improving the offer, Suraksha has now promised to issue NCDs (non-convertible debentures) worth Rs 1,200 crore to banks, taking its total offer to nearly Rs 7,800 crore.
For homebuyers, the company has reduced the timeline of completion of some projects, wherever feasible. Moreover, Suraksha group will immediately infuse Rs 300 crore if its bid is approved by the CoC to ensure construction works do not hamper till the resolution plan gets approved by National Company Law Tribunal (NCLT).
In a letter to Interim Resolution Plan (IRP) Anuj Jain, Suraksha group on June 4 had said that it had already submitted a legally compliant resolution plan on May 18 and the bid was deliberated upon in the meeting of the CoC. Suraksha had said it plans to further revise the resolution plan to improve offering for both homebuyers and bankers. Suraksha had said it plans to further revise the resolution plan to improve offering for both homebuyers and bankers.
Stating that the company never asked for any extension and always submitted bid before deadline, Suraksha had said: "we request you to grant us time of at least 7 days to submit an improved revised resolution plan, in the interest of lenders and homebuyers."
In the May 18 bid, Suraksha group had offered over 2,600 acre land to bankers and promised homebuyers to complete the pending over 20,000 flats in 42 months.
Yamuna Expressway that connects Greater Noida to Agra will be retained by the company as per the bid. Last week, financial creditors of embattled JIL decided to give time till June 4 to NBCC and Suraksha group to submit their final bids.
NBCC, the government’s construction arm, had submitted its revised bid on June 4 while Suraksha Group had asked for seven days' time to submit its bid, sources had told Moneycontrol on June 4.
In a letter to Interim Resolution Plan (IRP) Anuj Jain on June 4, Suraksha Group had said it had already submitted a legally compliant resolution plan on May 18 and the bid had been deliberated upon in the meeting of the CoC.
"...we are evaluating the possibility of revision in our resolution plan so as to incorporate better terms for homebuyers including further reduction in the project completion timelines, reviving and expediting construction work immediately after the CoC approval as well as infusion of funds for the same," the letter had said.
"The said evaluation with respect to reduction in completion timelines and land monetisation timelines, being complex involves considerable time and efforts especially in current pandemic situation," the letter had said.
Pointing out that the company had never asked for any extension before and always submitted a bid ahead of the deadline, Suraksha had said: "We request you to grant us time of at least 7 days to submit an improved revised resolution plan, in the interest of lenders and homebuyers."
On May 27, Jaypee Infratech’s lenders had voted for extending the bidding process allowing both the companies to submit their revised bids by June 4 to acquire the embattled firm through an insolvency process and complete the 20,000 homes that have been delayed by almost a decade.
In their previous bids, NBCC had offered 1,526 acre land. On Yamuna Expressway, NBCC had proposed to offer 85 percent equity in the road asset to lenders and had said that it will retain 18 percent share. In the 2019 bid, it had proposed 100 percent transfer of the highway.
In the fourth round of the bidding, Surakasha group had proposed to give 2,651 acres of land parcels to lenders. It has earmarked 1,486 acre to dissenting lenders out of the total land parcels offered in the proposal.
Suraksha group had decided to keep Yamuna Expressway with itself. It had also proposed a line of credit of Rs 3,000 crore as working capital for construction of projects. It also gave an undertaking that any shortfall to the dissenting creditors will be met by the company through pumping of more funds or assets.
The two firms had earlier offered to complete the projects within 42 months.
Earlier, Jaypee Infratech’s creditors had voted on a proposal to give a seven-day extension to NBCC and Suraksha Group to submit revised plans to take over the embattled firm and complete the delayed construction of around 20,000 homes. The process concluded on May 28.
Sources had said that members representing 98.54 percent of the voting rights gave their assent to the proposal to provide a final opportunity to both the resolution applicants to submit their revised bids within seven days.
Over 20,000 homebuyers have 56.61 percent voting rights in the CoC and that of Fixed Deposit Holders is 0.13 percent. As many as 13 banks have 43.26 percent voting share.
The CoC, on May 24, decided to provide another opportunity by way of additional time of seven days, to both the resolution applicants, i.e. NBCC and Suraksha, to submit their revised Resolution Plans in accordance with the provisions of the Code and the CIRP Regulations and the Supreme Court judgment dated March 24, 2021.
It also proposed that fresh plans be invited from both the resolution applicants besides asking the IRP to file an application on behalf of CoC before the Supreme Court to seek further additional time of 30 days until July 7, 2021, to complete the Corporate Insolvency Resolution Process of Jaypee Infratech Limited.
The CoC of debt-ridden Jaypee Infratech had met on May 24 to discuss the addendum to its final bid filed by the NBCC.
The IRP was of the view that both the NBCC’s proposals offering dissenting financial creditors (DFCs) non-convertible debentures for payment of liquidation value and the proposal offering Guarantee Security Interest and Promoter Security Interest for payment of liquidation value, was not in accordance with the Insolvency and Bankruptcy Code (IBC).
NBCC filed an addendum to its bid and also wrote a letter to the Interim Resolution Professional (IRP) Anuj Jain on May 24, drawing his attention to the legal opinion taken from retired judge Justice AK Sikri, which was submitted along with the NBCC’s Resolution Plan dated May 18, 2021.
It even questioned Jain’s jurisdiction in rejecting its offer.
The government’s construction arm NBCC on May 26 has said that its resolution plan for taking over the embattled firm Jaypee Infratech was ‘legally compliant’ and that if it is permitted to submit a fresh bid, it will attempt to answer all objections raised by the interim professional Jain.
On May 23, the Chairman of Jaiprakash Associates (JAL) Manoj Gaur also wrote a letter to the IRP urging him to consider JAL's settlement offer, which was submitted before the Supreme Court in 2019.
On May 26, Suraksha group urged homebuyers to support its resolution plan and vote against a proposal to allow more time for submission of new offers by the company and NBCC. In a video message on YouTube, Suraksha ARC managing director and chief executive officer Aalok Dave told homebuyers that "we should be your first preference and not standby option".
Suraksha’s Resolution Plan, submitted with changes to Jain on May 18, was found to be compliant with the provisions of the IBC and corporate insolvency resolution process regulations, as well as the Supreme Court directions on the Jaypee matter.
The 21st meeting of the CoC was held on May 20. This is the fourth round of the bidding process.
JIL went into the insolvency process in August 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium.
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