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Jaypee Infratech lenders demand more land, debt-free Yamuna Expressway from NBCC: sources

Buyers demand delay compensation; Bidders asked to submit revised final proposals by December 3

The lenders of Jaypee Infratech, on November 28, sought certain clarifications from the two contenders – NBCC and Suraksha Realty – on the proposals that they had earlier submitted to acquire the embattled firm, sources said.

Bankers asked the NBCC to offer more land with a clear title, withdraw its offer related to unclaimed flats and pledged land, and transfer the Yamuna Expressway to them without any debt obligation.

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

Close

Sources at NBCC said that they have already complied with demands of lenders made in May, including the increase in land-debt swap deal to 1,426 acre from 950 acre. However, their board would be holding a meeting tomorrow to discuss the demand and finalise the resolution plan that they would be submitting by December 3, which was the final date given by the CoC to submit their revised bids. The CoC also said they will be meeting next on December 6.

It should be remembered that 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 home buyers have voting rights in the CoC.  Both NBCC and Suraksha have promised to deliver flats to over 23,000 homebuyers within three to four years.

Earlier this week, homebuyers had written to their authorized representative Kuldeep Verma seeking clarifications on the expected voting on the resolution plans submitted by NBCC and Suraksha Realty.

They had proposed that the resolution plan of NBCC be put to vote first at the 15th meeting of the CoC.

“The real affected and suffering creditors (homebuyers) want a successful resolution at any cost. Present Resolution Plan (RP) submitted by Suraksha is slightly higher on the Evaluation Matrix than that of the NBCC, though it is inferior to its own plan that was submitted in the past, and was rejected by the corporate creditors. Thus, in all likelihood they may reject it this time also. Homebuyers at large, though not averse to the RP of Suraksha, having burnt their hands/fate with a private player i.e. Jaypee Group, are apprehensive of the fortunes of another private player, especially in the present extremely weak economy,” the letter sent to the authorized representative had said.

The Suraksha bid, the buyers had pointed out is silent on certain key issues like the provisioning of tax dues of JIL.

They had also demanded that the possession of the completed flats be given to them with all the promised amenities and landscaping. "The representative should ensure that houses of reasonably good quality of construction and safe habitable conditions are handed over to them and that there is no arbitrary increase in the super built-up area. There should also be a reasonable compensation in lieu of delay penalty which the corporate debtor would have be liable to pay under the RERA or through NCDRC," the letter had said.

Earlier, RBSA, a firm appointed by the insolvency resolution professional, had conducted an analysis of the bids submitted by the two firms in which Suraksha was given a score of 27, while the NBCC scored 20. The assessment was done on a score of 100 and the points were awarded on the basis of the proposals submitted by them. The firm also analysed the upfront cash inflow, debt resolution towards banks, homebuyers, payment of penalities, debt asset swaps, liquidation of assets and completion deadlines.

While it was pointed out that the marks given to the bidders Suraksha and NBCC were based on a formula that was agreed upon by the lenders, some of the homebuyers suggested that NBCC should have received more points.

In fact, buyers had written to their authorized representative Kuldeep Verma that the ‘faulty’ Evaluation Matrix ranking of NBCC be corrected and that a pre-voting of homebuyers be held to choose one of the two bids.

NBCC’s proposal

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

Moreover, NBCC will share 50 percent 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 on debt worth Rs 2,500 crore against the expressway for the completion of over 20,000 flats that it expected to complete in the next four years.

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

Suraksha’s Realty’s 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 it will retain the Yamuna Expressway with itself.

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

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

What has happened so far

Jaypee Infratech, which is a subsidiary of crisis-hit Jaiprakash Associates, went into insolvency process in 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium.

In the first round of insolvency proceedings conducted last year, the Rs 7,350-crore bid of Lakshdeep, part of the Suraksha Group, was rejected by lenders. The CoC rejected the bids of Suraksha Realty and NBCC in the second round held in May-June this year. The matter reached to the National Company Law Appellate Tribunal (NCLAT) and then to the apex court.

 

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First Published on Nov 28, 2019 08:16 pm
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