Jaypee Infratech case: NBCC, Suraksha submit revised bids

The Jaypee Infratech case involves more than 20,000 homebuyers who have been anxiously waiting for the completion of their homes for over a decade.

The government’s construction arm NBCC and Mumbai-based Suraksha Group have submitted their revised bids under an insolvency process to acquire debt-laden realty firm Jaypee Infratech. The two plans would be discussed at the 21st committee of creditors (CoC) meeting to be held on May 20, sources said.

This will be the 21st meeting of the CoC, sources said.

"Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) and in accordance with the requirements of sub-clause 16(g) of Clause A of Part A of Schedule III of LODR, we wish to inform you that a meeting of Committee of Creditors will be held on 20th May, 2021 inter-alia to discuss the final Resolution plan(s)," Jaypee Infratech said in a regulatory filing on May 19.

Sources also say that in the bid submitted by Suraksha Consortium there is an upfront cash infusion for homebuyers and 2,651 acres of land to banks and financial institutions to settle the Rs 7,116 crore debt.

It has earmarked 1,486 acres for dissenting lenders.

Mumbai-based realty firm Suraksha Group has also written to financial creditors and objected to the extension of deadline for submissions of bids, sources said.

In a letter to JIL's Interim Resolution Professional (IRP) Anuj Jain and the members of Committee of Creditors (CoC), Suraksha said that extension is against the spirit of the Supreme Court order in March this year on the pending insolvency matter of Jaypee group firm.

NBCC on the other hand has offered 1,903 acres of land to banks and financial institutions to settle Rs 9,782 crore debt. It has also offered 377 acres of the 1903 acres of land for dissenting creditors.

The two firms have offered to complete projects within 42 months.

NBCC and Suraksha Group had earlier submitted their revised bids on May 10.

NBCC has also incorporated some of the suggestions made by homebuyers on the resolution plan submitted by it on April 28, 2021. One of them is tower wise schedule of delivery. They have shortened the delivery timelines and would be delivering 70 percent (around 13,000) of the units within 30 months. All units, including plots, would be delivered within 42 months.

NBCC has proposed to set up a single-window redressal system to help resolve grievances of homebuyers. The single-window redressal system would be put in place after the transfer date.

It has also considered homebuyers’ representative in the steering committee, sources said.

Earlier, the Interim Resolution Professional (IRP) Anuj Jain had approached the Supreme Court asking for an extension of the corporate insolvency resolution process (CIRP) by a month.

In an application filed before the Supreme Court, the IRP has said that the completion of the resolution process within 45 days has become unfeasible due to the current surge in COVID-19 pandemic and restrictions imposed by different states, sources said.

The IRP had convened the 17th meeting of the CoC on April 12, 2021, to discuss the resolution plans submitted by NBCC and Suraksha. Both NBCC and Suraksha had submitted their revised resolution plans on April 28. In the 18th meeting of the CoC held on April 17, lenders had asked NBCC and Suraksha group to improve their bid and offer more land parcels under the land-debt swap deal. They had also asked the bidders to specify the treatment of dissenting financial creditors.

The 19th meeting of the CoC was convened on April 29, 2021.

Suraksha Group had held a meeting with homebuyers on May 2, 2021, and NBCC held one on May 7, 2021, for discussions/suggestions on the resolution plan of Jaypee Infratech.

On March 24, the Supreme Court had directed the interim resolution professional of Jaypee Infratech to invite modified or fresh resolution plans only from Suraksha Realty and state-run NBCC and complete insolvency proceedings in 45 days. The timeline ends on May 8.

The apex court had also said that Rs 750 crore deposited by Jaypee Associates would not go to Jaypee Infratech and that NBCC would not be allowed to utilise it for construction.

It had said, “However, the final treatment of the said amount of Rs 750 crore with accrued interest shall be determined by NCLT after the reconciliation of accounts between JAL and JIL and in terms of the directions contained in this judgment”.

Financial creditors of debt-ridden Jaypee Infratech, including banks and homebuyers, met on April 29 and held discussions on the revised resolution plans submitted by the two entities. The case involves more than 20,000 homebuyers who have been anxiously waiting for the completion of their homes for over a decade.

This is the fourth round of the corporate insolvency resolution process.

In November 2019, the top court had directed the completion of Jaypee Infratech's insolvency process within 90 days and the revised resolution plan to be invited only from the NBCC and Suraksha Realty.

The December 2019 round of voting was the third round of the bidding process to find a buyer for Jaypee Infratech, which went into the Corporate Insolvency Resolution Process (CIRP) in August 2017.

NBCC had then proposed to complete over 20,000 pending flats in housing projects launched by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh). Homebuyers' claims amounting to Rs 13,364 crore and lenders' claims worth Rs 9,783 crore were admitted.

In its bid in December 2019, NBCC had offered 1,526 acres of land to lenders under a land-debt swap deal. On Yamuna Expressway, NBCC has proposed to transfer the road asset to lenders but before that, it would take a loan of around Rs 2,500 crore against toll revenue to fund construction spend.

More than 10,000 homebuyers and major lenders of Jaypee Infratech, including IDBI Bank and State Bank of India, had voted in favour of the resolution plan submitted by the government's construction arm NBCC to acquire the embattled real estate firm. The CoC comprising 13 banks and around 21,000 homebuyers, approved the resolution plan of NBCC with a 97.36 percent vote in favour in the third round of the bidding process.

In the same round, Mumbai-based Suraksha Realty had improved its bid to acquire Jaypee Infratech by offering more land and upfront cash to lenders. It had increased its upfront payment to lenders to Rs 190 crore from Rs 175 crore, while size of the land-debt swap improved to 2,275 acres from 2,220 acres in its final bid submitted on December 3.