Homebuyers complain that the situation has left them confused.
NBCC, whose bid to acquire Jaypee Infratech got rejected by lenders last week on account of lack of approvals by the administrative authorities, is hopeful that it would get clearances for the revised bid from Department of Investment and Public Asset Management (DIPAM) and Department of Expenditure soon, sources told Moneycontrol.
During the meeting on April 26, NBCC had sought some time to take all the necessary approvals but the lenders decided to put on vote on April 30 the offer of Suraksha Realty-led consortium and not NBCC's.
After the COC meeting, NBCC had also written a letter to the interim resolution professional (IRP) Anuj Jain expressing its interest in taking over the embattled firm and that its offer should be considered on merit.
In its meeting, the committee of creditors (CoC) decided not to consider NBCC's bid as it was subject to approval of various government authorities. NBCC had informed the lenders that day that the company was in process of seeking government approvals and it should be given some time before the voting could be carried out on its plan.
NBCC continues to be very interested in the resolution process and accord the interest of the homebuyers, utmost priority, the letter written by NBCC to the IRP said.
"It is to bring to your attention that during the CoC meeting on 26th April it was clarified by NBCC that these approvals have been applied as expected shortly and it was requested to consider some time frame for allowing NBCC to obtain the approvals before the actual voting on the plan. This appeal was made on basis of the fact that the CoC meeting was being held on 26th April, just 2 days after the submission of plan on 24th, and there was not enough time to inform the CoC regarding the status of Govt approvals. We are confident that our proposal will safeguard the interest of the home buyers and the lenders. Therefore, we request the CoC to consider our proposal on merit," the letter written by NBCC to the IRP said.
Homebuyers complain that this has left them confused. "This causes extreme confusion among homebuyers. At a time when the Suraksha bid is to be put to vote on April 30 to ensure that the results are compiled by May 3 and submitted before May 6, NBCC is still saying that they have applied for approvals. It is they who have failed to meet the statutory timelines," said homebuyers.
"It was NBCC who had asked for an extension to submit the revised bid and were granted time until April 24. They cannot complain now that CoC meeting was scheduled only two days after the bids were to be submitted. Suraksha had submitted its bid on time. The CoC meeting had to take place on April 26 so that the May 6 timeline could be met," said homebuyers.
The Allahabad Bench of NCLT, that heard the application for the 270-day extension of the deadline under IBC on Monday, will take up the matter again on May 6. It ordered that the corporate insolvency resolution process (CIRP) must go on and should not be fettered, sources said.
"The NCLT, Allahabad Bench, has made it clear that the resolution process would go on, and would endeavour to dispose the application as soon as possible. In any event it is settled position of law that if the Resolution Professional is unable to function that time period has to be excluded from CIRP period of 270 days, in the present case RP is not even appointed, said legal experts."The suspended board of directors have no say at this stage, the supreme court in Innoventive Industries case had indicated that such actions are not tenable at the behest of suspended members of the board," said
Amit Mishra, Partner, P&A Law Offices, who is representing the Jaypee homebuyers.
Sources said that it now remains to be seen if fresh bids will be invited in case the Suraksha bid does not go through. But that can happen only if extension to the 270-day deadline under IBC is granted by NCLT. The deadline ends on May 6.
In its previous bid, NBCC had offered 1400 acres of land worth Rs 6000 crore and equity infusion of Rs 500 crore upfront. In the revised bid, it has offered 950 acres of land worth Rs 5001 crore and reduced the equity infusion from Rs 500 crore to Rs 200 crore, sources said.
For secured financial creditors, it has offered a payment of upfront amount of Rs 1500 crore, 100 percent in Yamuna Expressway SPV, 100 percent in land bank SPV. The land bank SPV is worth Rs 5001 crore and totals 950 acres
Suraksha had earlier offered about Rs 20 crore as upfront payment but in the revised bid, it has proposed an equity infusion of Rs 50 crore and a working capital loan of Rs 3000 crore against a requirement of Rs 2404 crore to complete construction work, sources said, adding their completion timelines are on an average one year less than NBCC.
Business conglomerate Adani Group had also entered the fray by putting in a bid to acquire Jaypee Infratech. Lenders will also have to decide on Friday whether the company would be allowed to enter the race at this stage.
The National Company Law Tribunal (NCLT) in 2017 had admitted the application of a consortium led by IDBI Bank seeking resolution of Jaypee Infratech, and appointed Anuj Jain as the insolvency resolution professional (IRP) to manage the company's business and invite bids from investors.
In the first attempt under the insolvency process, lenders had rejected the Rs 7,350 crore bid of Lakshdeep, part of Suraksha Group, as they found it to be substantially lower than the company's net worth and assets.
Therefore, the IRP in October 2018 started a fresh initiative to revive Jaypee Infratech.
A few day before, promoter of embattled real estate firm Jaypee Infratech Manoj Gaur had once again offered to complete the much-delayed real estate projects within a period of four year by pumping in Rs 1500 crore in an escrow account but homebuyers were skeptical and termed the meeting held on Friday as an ‘eyewash’, ‘old wine in new bottle’ and questioned the timing of the meeting saying that the meeting was called to garner support from buyers whose approval is required for any resolution plan or settlement plan to go through.
Gaur during the meeting with homebuyers claimed that he was a ‘victim of circumstances’, made a presentation and proposed that Rs 1500 crore would be set aside in an escrow account for completion and construction of the projects that are proposed to be completed within four years.
As many as 22,000 homebuyers are stuck because of significant delay in delivery of flats by Jaypee group's debt-ridden firm Jaypee Infratech, which is undergoing insolvency proceedings.
The realty firm has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI Bank. Other lenders are IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance.
Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 units. JAL had deposited Rs 750 crore in the registry of the Supreme Court for refund to buyers. However, this amount was transferred to the NCLT as per an order of the apex email@example.comSubscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.