2 March 2019: Lenders of crisis-hit realty developer Jaypee Infratech, in a meeting held on Friday, sought clarity from state-run NBCC on certain legalities and on its bid to acquire the company. NBCC is expected to respond to these queries and observations in a week’s time, said two persons with direct knowledge of the development.
“Committee of Creditors (CoC) made certain observations and sought clarifications from NBCC on certain legalities and the bid. The committee was keen to understand NBCC’s model for the proposal and was also asked if it can complete the projects in less than five years,” said one of the persons mentioned above. The meeting lasted for almost 90 minutes.
State-run NBCC and Suraksha Asset Reconstruction Company have bid and are in race to acquire Jaypee Infratech under the Insolvency Resolution Process.
However, it could not be ascertained if the other bidder Suraksha Asset Reconstruction Company too was called for the meeting today. NBCC declined to comment for the story.
Jaiprakash Associates, promoter of the stressed realty developer, has also submitted a proposal to lenders of its subsidiary to settle their dues. Both the bidders have already made presentations to the Committee of Creditors (CoC) two weeks ago. Lenders are likely to hold more meetings with the bidders before taking a final call.
The company has an outstanding debt of about Rs 9,800 crore. Its lenders include IDBI, IIFCL, Axis Bank, Bank Of Maharashtra, Corporation Bank, ICICI Bank, IFCI, J&K Bank, LIC, SBI, Syndicate Bank, Srei Equipment Finance, and Union Bank.
About 32,000 home buyers were left in the lurch after the Allahabad bench of the NCLT on August 9 classified Jaypee Infratech as insolvent on the petition filed by IDBI Bank under Section 7 of IBC, 2016. Jaypee had defaulted on a Rs 526-crore loan by the bank.
In 2017, the NCLT admitted the application of an IDBI Bank-led consortium seeking resolution of Jaypee Infratech’s debt under the Insolvency and Bankruptcy Code. Lakshadweep, which is part of the Suraksha Group, subsequently emerged as the frontrunner to acquire the firm. However, in May last year, lenders rejected its Rs 7,350-crore bid, as they found it to be inadequate. On the National Company Law Tribunal‘s direction, Jain started a fresh initiative in October 2018 to revive the company that has several stuck housing projects in Noida and Greater Noida.
A subsidiary of Jaypee Group flagship firm Jaiprakash Associates, Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 units.