NBCC, the government’s construction arm, on June 4 submitted its revised bid under an insolvency process to acquire debt-laden realty firm Jaypee Infratech while Mumbai-based Suraksha Group has asked for seven days' time, sources told Moneycontrol.
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.
The two plans had to be submitted by 5 pm on June 4 and were to be discussed at the 23rd committee of creditors (CoC) meeting to be held on June 7.
Sources said that NBCC has submitted the bid but Suraksha Group has asked for a seven-day extension. The CoC would now decide whether to give Suraksha more time to submit its revised bid on June 7.
Suraksha Group had written to the IRP Anuj Jain requesting for a seven-day extension to submit its revised bid as it intends to further improve its project completion timelines from 42 days submitted in its previous bid, sources added.
It also wants to work out a mechanism to deploy funds immediately after the CoC approval so that construction can begin right away. Additionally, it wants time to provide a timeline for monetisation of lands to banks, sources said.
Both NBCC and Suraksha Group refused to comment. The IRP Anuj Jain did not respond to queries sent by Moneycontrol.
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.
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 also 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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