LM: Four potential bidders show early interest in troubled Jet Airways

1 August 2019: As many as four potential bidders have evinced interest in Jet Airways (India) Ltd, a person with direct knowledge of the matter said, though talks for a potential bid are still in early stages.

SBI Capital Markets, which is advising the lenders in the process of finding new investors for the grounded airline, has reached out to as many as 20 potential investors, the person said, requesting anonymity.

“Among these, four parties have shown initial interest to bid for Jet Airways,” the person cited above said on condition of anonymity.

The airline’s committee of creditors (CoC) met on Thursday to discuss issues related to its insolvency proceedings. The lenders decided that they would extend the deadline for bids if the airline failed to attract suitors by Saturday.

State Bank of India (SBI), which leads the lenders’ consortium for Jet Airways, has sanctioned ₹10 crore as a part of the approved interim funding of $10 million (about ₹69 crore) for the airline, which was decided by the lenders earlier in July. “Other banks are expected to follow suit and sanction their part of the funding in the coming days,” the person added.

Besides maintaining Jet Airways’ planes and other assets, the interim funding will also be used to hire people on contract to verify various creditor claims.

The lenders, however, have reservations about releasing a month’s salary for Jet Airways’ staff as sought by several worker unions, said another person aware of the matter.

Jet Airways, which grounded its operations in April, due to an acute fund crunch, is yet to pay salaries since January to a section of its staff such as pilots, engineers and general managers. The airline hasn’t paid salaries to the rest of its staff since March.

On 20 June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC) after lenders referred it to the bankruptcy court.

The group of 26 banks, led by SBI, have approached the tribunal to recover dues of more than ₹8,500 crore. The lenders have been trying to sell Jet Airways for the past five months without success.

The LiveMint reported

LM: NCLAT sets aside order directing return of land to Jaypee Infratech

1 August 2019: The National Company Law Appellate Tribunal on Thursday set aside an NCLT order that directed Jaiprakash Associates Ltd to return 758 acres of land, which was pledged with several banks, to debt-laden Jaypee Infratech.

In May last year, the Allahabad bench of the National Company Law Tribunal (NCLT) had asked JAL to return 758 acres of land to its subsidiary Jaypee Infratech, declaring the transfer of the land as “fraudulent” and “undervalued”. It had directed JAL to release and discharge interest created over the patch of land to lenders.

All the banks and JAL had approached the NCLAT against the NCLT order. A stay was granted to all petitioners.

In its judgement, a two-member NCLAT bench, headed by Chairman Justice S J Mukhopadhaya, allowed the pleas of all banks as well as JAL and said that the transactions were genuine and the allegation of undervaluation was not justified.

“We have held that the transactions were made in the ordinary course of business in absence of any contrary evidence to show that they were made to defraud the creditors of the Jaypee Infratech or for any fraudulent purpose, on mere allegation made by the ‘Resolution Professional,” said the NCLAT.

The appellate tribunal said that “it was not open to the NCLT to hold that mortgage deeds, in question, were made by way of transactions which come within the meaning of ‘fraudulent trading’ or ‘wrongful trading’.”

The NCLAT also said that the Allahabad bench of NCLT had passed the order “on the basis of wrong presumption and error of fact held that transactions in question amount to ‘preferential transactions’.”

“All the appeals are allowed,” said the NCLAT, adding “we set aside the impugned order dated May 16, 2018”.

The petitioner banks are: Axis Bank, Standard Chartered, ICICI Bank, SBI, Bank of Maharashtra, United Bank of India, Central Bank of India’, ‘UCO Bank’, ‘Karur Vyasa Bank , L&T Infrastructure Finance Company, ‘Canara Bank, Karnataka Bank, IFCI, Allahabad Bank, Jammu & Kashmir Bank and The South Indian Bank Ltd.

Meanwhile, the NCLAT clarified that it has made no observations against JAL, against whom some lenders have approached the NCLT to initiate insolvency proceedings.

“However, we make it clear that we have not made any observations with regard to the Promoters or Directors in absence of any appeal preferred on their behalf,” said NCLAT.

Banks have given loans to Jaiprakash Associates, JP Group’s flagship firm against the land bank owned by Jaypee Infratech.

The LiveMint reported

TOI: Centre to back NBCC to finish Jaypee projects

1 August 2019: After Amrapali and Unitech, the government is now looking to back public sector builder NBCC to construct the remaining 25,000 Jaypee Infratech apartments and villas in and around Noida.

During a meeting called by finance minister Nirmala Sitharaman, the Centre agreed to look at an arrangement to deal with pending tax claims up to August 2017 when insolvency proceedings were initiated against Jaypee Infratech.

While the tax issues for the remaining period will be looked at in the context of the amended Insolvency & Bankruptcy Code, where the resolution plan cleared by the National Company Law Tribunal (NCLAT) is binding on authorities, the Uttar Pradesh government and other agencies will also be asked to review their claims, sources told TOI.

NBCC’s earlier proposal had faced resistance as it was a conditional offer and depended on the state government and tax authorities reviewing their claims.

The Times of India reported

FE: Jaypee Infra CoC to discuss fresh bids on August 5

1 August 2019: The committee of creditors (CoC) of Jaypee Infratech will meet on August 5 to discuss the future course of action following the NCLAT’s Tuesday order of extending the resolution period by 90 days. The panel will deliberate on the process for inviting fresh bids for the debt-laden real estate developer.

Sources said the CoC’s agenda includes inviting fresh resolution plans, preparation of the process note for request for resolution plan (RFRP) as well as reducing the notice period for calling a meeting of the panel. This will be the third time that bids are being invited for JIL.

“Although, the NCLAT denied Manoj Gaur any chance of participating, the window is open for NBCC, which is likely to come up with a revised plan. In the last CoC, lenders were not in favour of NBCC’s condition that unsold housing units should be taken over by the bankers. Hence its bid was rejected. Adani Group will also be asked to place its resolution plan,” one of the sources said.

JIL’s corporate insolvency resolution process (CIRP) period of 270 days expired on May 6 this year and the NCLAT in its July 30 order excluded the 90 days for counting the 270 days, which will now be counted from the date of the NCLAT order, that is July 30. This has been done by the appellate tribunal to enable the resolution professional (RP), Anuj Jain and the CoC to call for fresh bids.

“CoC will vote on bringing down notice period for calling a meeting of the panel from five days to two. This means that after it is passed, CoC meetings can be called by giving its members a notice of 48 hours,” sources said.

According to the Insolvency and Bankruptcy Board of India (IBBI) regulations, CoC meetings can be called by giving a five day notice to members, but the panel can reduce this period to not less than two days in case the notice is being sent to an authorised representative and one day in other cases, the source explained.

On Tuesday, a two-member bench headed by NCLAT chairman Justice S J Mukhopadhaya, extended JIL’s CIRP period by 90 days, which includes a 45-day window for inviting fresh bids. Besides rejecting plea of JIL promoter, Jaiprakash Associates to be eligible to submit bid, it has asked the state-owned NBCC to submit a fresh resolution plan.

The NCLAT did not express any opinion over the bid to be filed by Adani. “It is informed that Adani Infra also proposed to file resolution plan, but we are not expressing any opinion with regard to the same,” it said.

The Financial Express reported