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Jaypee Infratech case: NBCC may offer 10% more land to lenders

Suraksha may increase amount promised as compensation for delay; may hand over 250 towers in three years to buyers.

 
 
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With only a day left for the two bidders of Jaypee Infratech to submit their revised resolution plans, the government's construction arm NBCC Ltd is expected to offer nearly 10 percent more land to lenders and reduce the timeline for completion of about 20,000 flats by three to four months in its revised bid, sources told Moneycontrol.

It may also decide keep the share of unclaimed flats with itself, sources said, adding it may now consider giving additional land to lenders in lieu of its offer to provide profit share in unclaimed flats.

In its current proposal, NBCC had said that it will share 50 per cent of the sale proceeds of benami or unclaimed flats. From the sale proceeds, receivables from earlier buyers and any expenses related to tax/duties/ legal will be deducted, it had said.

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Suraksha Realty too held an hour-long concall with homebuyers on December 1. This was an interaction between Jaishree Swaminathan, representing all homebuyers, and Aalok Dave, MD & CEO of Suraksha Asset Reconstruction Limited, sources said. The company may consider increasing its offer with regard to compensation for delay. It is currently offering Rs 100 crore.

"We are in no way connected to Jaypee and our proposals have been rejected before. We are a private operator and putting a lot at stake to be a part of this. We are focused on the completion of the project and any such allegations of being linked to JIL are only rumours. We will try and improve the Rs 100 crore that we have decided to provide for," Dave was quoted as saying.

As far as the completion schedule is concerned, Dave said that the company has 250 towers to complete and would hand over the first 80 towers in one or one and a half years; the next 120 will be done within two or two and a half years and the remaining 50 within three years. The builder may take a nine-month grace period.

Last week, the Committee of Jaypee Creditors met NBBC and Suraksha representatives for several hours to discuss their proposals and asked them to revise their bids. They wanted NBCC to provide more land with clear title in lieu of its current offer of over 600 acres land that is under litigation and some unclaimed flats. Also, they wanted complete Yammu Expressway Project without any debt obligation.

The homebuyers' representative Kuldeep Verma demanded that delay compensation should be paid to homebuyers as promised by Jaypee Infratech. The compensation for future delays should be as per RERA, sources said.

Mumbai-based Suraksha Realty was told to increase the upfront payment to lenders from the existing offer of mere Rs 25 crore.

Homebuyers, which has been declared as financial creditors, asked the NBCC to compensate for huge delay in completion of flats. Suraksha Realty, which has set aside land worth Rs 100 crore for delay compensation, was told to enhance the amount.

In the meeting of Committee of Creditors (CoC), the officials of both NBCC and Suraksha had said that the demand of financial creditors would be considered positively.

NBCC and Suraksha submitted fresh bids on November 17 as per direction of the Supreme Court.

The next Committee of Creditors meeting is now expected to be held on December 7.

On November 6, the Supreme Court had directed that Jaypee Infratech’s insolvency process should be completed within 90 days and asked the resolution professional to invite revised bids from the NBCC and Suraksha Realty.

Jaypee Infratech's Interim Resolution Professional (IRP) Anuj Jain had sought bids from state-owned NBCC and Mumbai-based Suraksha Realty as per the direction of the Supreme Court. This is the third round of bidding process.

As many as 13 banks and over 23,000 homebuyers have voting rights in the CoC. Buyers have nearly 60 per cent votes. For the bid to be approved, 66 per cent votes are required.

Both NBCC and Suraksha have promised to deliver flats to over 23,000 homebuyers within three to four years.

NBCC proposal

To settle an outstanding claim of nearly Rs 9,800 crore to bankers, NBCC has offered 1,426 acre land worth Rs 5,000 crore, 75 per cent of the 858 acre land likely to be transferred back to Jaypee Infratech and 50 per cent of the sale proceeds of benami or unclaimed flats. From the sale proceeds, amount receivables from earlier buyer and any expenses related to tax/duties/ legal will be deducted. Sources said that there are about 3,000 such unclaimed units.

Moreover, NBCC will share 50 per cent of the sale proceeds of benami or unclaimed flats. From the sale proceeds, receivables from earlier buyers and any expenses related to tax/duties/ legal will be deducted.

The public sector firm has proposed to transfer the Yamuna Expressway, which connects Noida and Agra, to the lenders, but before that it plans to take Rs 2,500 crore debt against the expressway for completion of over 20,000 flats to customers in next four years.

Sources said that the NBCC has pegged the value of 640 acre land (75 per cent of 858 acre) at around Rs 2,500 crore, while the Yamuna Express Way has been valued at Rs 2,000 crore after deducting the debt.

Suraksha proposal

Suraksha Realty has offered 1,934 acres worth Rs 7,857 crore to lenders. It proposed to bring in Rs 2,000 crore as working capital to complete construction in the next three years and will retain the Yamuna Expressway with itself.

The Mumbai-based developer has proposed to complete flats in the next three years.

On delays compensation, the NBCC has proposed Rs 5 per sq per month to be payable after grace period of one year from the scheduled delivery date, while Suraksha offers Rs 10 per sq ft post grace period of 9 months.

Suraksha Realty has proposed that any liabilities towards farmers compensation would be extinguished and not passed on to home buyers, while NBCC has stated that it should be collected from end user including home buyers and development authority.

Suraksha Realty has also proposed to set aside Rs 100 crore worth land for the welfare of the home buyers.

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First Published on Dec 2, 2019 12:56 pm
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