TOI: Jaypee buyers want to be in monitoring committee

7 June 2020: Despite a growing clamour for fast takeover the of debt-ridden Jaypee Infratech, state-run NBCC has said that it will wait for a clear direction from the National Company Law Appellate Tribunal (NCLAT) to start construction activity at the stalled Wish Town project.

Meanwhile, a homebuyers’ association has appealed to the NCLAT to be made a party in the interim monitoring committee that will look into the day-to-day affairs of the builder company.

“There has been a mismatch in the financial responsibility we have taken for the completion of Wish Town and what NCLT has actually awarded us. Unless the NCLAT settles it in our favour, we will not initiate any takeover bid,” VK Chaudhary, chief general manager of NBCC told TOI.

“Construction work at the Wish Town project is in progress and a monitoring committee is present, but NBCC will not get involved without a 100% clarity from the court,” he added.

Of 35,000 Wish Town flats, Jaypee Infratech claims that just 19,000 flats are left to be constructed.

Surprisingly, JIL completed 10,000 flats during the insolvency resolution period from 2017-2019. JIL’s day-to-day operation is now supervised by a monitoring company, which includes former interim resolution professional Anuj Jain and NBCC officials.

However, the Wishtown Welfare Society with a membership of 1,248 homebuyers has appealed to the NCLAT for its inclusion in the monitoring committee. “In our appeal, we have pointed out that the monitoring committee that will implement the resolution plan has no homebuyer representative,” said Raunak Jain, the legal counsel for the homebuyers.

Commenting on the absence of homebuyers from the monitoring committee, former interim resolution professional Anuj Jain said, “The investors in the project can only be part of the panel if the NCLAT gives its nod to the same.”

Source: The Times of India

MC: Edelweiss group acquires Navayuga group’s road assets in north-east India for $150 million

7 June 2020: The Edelweiss group, on June 7, announced the buyout of two annuity road assets in north- east India from engineering and core infrastructure player Navayuga Engineering ,the flagship entity of the Hyderabad based Navayuga group which is in deleveraging mode.
“The buyout has been struck for an enterprise value of nearly $150 million,” a source with knowledge of the matter told Moneycontrol. The transaction is one of the first infrastructure deals to be closed during the ongoing lockdown.

With the government’s thrust on boosting economic activity in north- east India, The Dhola and Dibang roads are of strategic importance as they ensure seamless all-weather connectivity between north- east and the rest of India. The Dhola bridge – the country’s longest river bridge, inaugurated by Prime Minister Narendra Modi in 2018 has opened new doors for economic development to both the states of Assam and Arunachal Pradesh.
The assets, namely Navayuga Dhola Infra Projects Limited (in Assam) and Navayuga Dibang Infra Projects Private Limited (in Arunachal Pradesh) have been acquired by the Edelweiss Group’s alternative investment fund Edelweiss Infrastructure Yield Plus and its portfolio company Sekura Roads Ltd.

Edelweiss Infrastructure Yield Plus which was floated two years back has gradually emerged as one of the most active domestic acquirers in the infra segment and now manages assets worth $1.5 billion. It competes with the likes of IndiGrid, Cube Highways and funds like GIC, KKR & Actis.
The fund is present in the transmission, road/highways and renewable energy segment and looks at helping Indian infrastructure companies to recycle their capital and focus on their core construction business. In June 2019, it acquired two transmission assets from Essel Infra and in January 2020, it acquired a 74 percent stake in French gas and power utility Engie’s solar assets in India.

Edelweiss Alternative Asset Advisors which manages Edelweiss Infrastructure Yield Plus has an AuM of over Rs. 28,000 crores. It focuses on providing long term growth capital to corporates. “Acquiring operating infrastructure assets provides impetus to the revival of the sector by helping construction companies to release capital and de-lever, enabling them to commence new projects which contribute to nation building and is becoming the core model to meet India’s infrastructure capital requirement,” said Hemant Daga, Deputy CEO – Edelweiss Global Investment Advisory

“We are happy to see the acquisition of these high-quality road assets to the Sekura Roads portfolio. This is in line with our strategy of investing in Infrastructure assets which can deliver predictable long-term yield to our investors. We now have a healthy portfolio of operating transmission and operating annuity road assets,” said Subahoo Chordia, Head of Edelweiss Infrastructure Yield Plus.

Chordia was previously associated with the group’s investment banking business and has spent two decades in the infrastructure sector.
Sachin Bhansali, CFO – Navayuga group, added “Navayuga group is looking to de-leverage its balance sheet and asset monetization is a critical component. This transaction will significantly ease out the debt position of the group and help free up cash.”

Source: moneycontrol

TOI : Will clear all dues of city manufacturers, assures Atlas Cycles

5 June 2020: Ludhiana: Even as bicycle parts manufacturers of Ludhiana are nervous after Atlas Cycles (Haryana), Sahibabad, shut down its plant, the latter have given an assurance that they will clear all dues of city-based cycle parts manufacturers. According to sources in the bicycle industry, the company has several crores rupees pending towards Ludhiana bicycle part factories against the material supplied by them to the company. Now, with company shutting down its plant, Ludhiana businessmen are jittery as they fear about the safety of their payments.

On Thursday, president of the United Cycle and Parts Manufacturers Association (UCPMA) D S Chawla spoke to senior functionaries in the Atlas Cycles (Haryana), Sahibabad, on behalf of Ludhiana industrialists and he has been assured by the company representatives that the payments of suppliers are safe and moreover, the company will start functioning normally after the resolution of a legal matter.

Giving more information to TOI, Chawla said, “On the subject of reports about the permanent closure of the Atlas Cycles (Haryana), Sahibabad, I spoke to very senior officials of the company on Thursday regarding the payments to be made to the Ludhiana vendors. In this connection I also spoke to other officials, including senior functionary N P Singh Rana. I have been informed by all of them this is not a permanent shut down and this is a temporary phase to save day to day expenses of the unit which are in crores (apart from the labour salaries).”

He added, “The company has an ongoing case in the NCLT, hearing on which is due on June 18. The company intends to get permission for sale of land in Sonipat, which is nearly 25 acres. The unconfirmed estimate of the pending dues of the Ludhiana industry are around Rs 100 crore, whereas the value of this land they intend to sell is much more than these dues. After disposing of the land with the permission of the NCLT, the company will have liquid money surplus and they will be in position to pay off all debts.”

“Moreover, the company has made it clear that they do not have any ill intentions of any kind to keep anyone’s dues and once the case is settled, they will resume the bicycle production like before and the bicycle parts manufacturers of Ludhiana will keep getting business from the company like before,” Chawla said.

Source: The Times of India

FE: Debt Rejigging: Jain Irrigation wants easier payment terms

3 June 2020: Jain Irrigation has submitted a proposal to lenders asking they restructure Rs 4,000 crore of loans, sources close to development told FE. The rejigging of debt is expected to be such that the company is allowed to repay the loans over a longer period. The plan has been shared with the rating agencies and State Bank of India (SBI) is likely to convene a meeting of lenders soon once the feedback from the agencies is in.

Lenders, who had earlier signed an Inter Creditor Agreement (ICA), are looking to come up with an out-of-court resolution plan for Jain Irrigation since initiating insolvency proceedings under the IBC is not an option.

On Wednesday, the Cabinet decided to suspend insolvency proceedings under IBC following an announcement made by the finance minister in March.

While some lenders had increased provisions, against the exposure, to 15% in the December quarter, when the account slipped to become a non-performing asset (NPA), others are expected to follow suit in the March quarter, in keeping with the income recognition and asset classification (IRAC) norms.

S&P has downgraded Jain Irrigation Systems to ‘D’ (default grade) for missing interest payments due on February 1, 2020. S&P also said the resolution plan might take longer than expected and the company’s operations will continue to suffer due to a lack of sufficient liquidity to manage its debt servicing and working capital requirements. In October, 2019, Care ratings had downgraded Jain Irrigation to ‘D’, due to a delay in servicing its debt.

Source: Financial Express

CNBC-TV18: Bids invited from 4 little known suitors shortlisted for Jet Airways

3 June 2020: Only four out of twelve suitors that came forward to submit an Expression of Interest to acquire grounded airline Jet Airways have made the eligibility cut, as per people in the know.

CNBC-TV18 had earlier reported that Jet Airways received twelve Expressions of Interest (EOIs) in the latest round of bidding. However, most of them did not meet the eligibility criteria set out by the committee of creditors, said people in the know.

Four players have now been shortlisted to submit bids for the airline, and have been asked to submit binding bids by July 11, CNBC-TV18 has learned. These include UK-based Kalrock Capital Partners along with an individual by the name of Murari Lal Jalan who is a resident of Dubai, people familiar with the matter told CNBC-TV18.

The second shortlisted player is another consortium comprising of Abu Dhabi based Imperial Capital Investments LLC (ICIL), Haryana-based Flight Simulation Technique Centre Pvt Ltd (FSTCPL) and Mumbai-based Big Charter Pvt Ltd (BCPL).

The third shortlisted player is a Canadian entrepreneur by the name of Sivakumar Rasiah, and the fourth player is Kolkatta based Alpha Airways, said sources who did not wish to be quoted.

Little is known about these four suitors that now remain in the fray for the airline. Banks CNBC_TV18 spoke to are not very confident of these EOIs getting converted into real bids, and say liquidation is a very real possibility.

This is the fourth round of bidding for Jet Airways, which was grounded over a year back and subsequently referred to the National Company Law Tribunal in June 2019 by its lenders.

The eight who did not make the eligibility cut included individuals Brijesh Singhla, Gladson Sabu Varghese, Jason Unsworth, Pramod Srivastav, Claude Bothello, as per sources. A consortium of Jet Airways employees also submitted an EOI, as did UK-based AdiGro Aviation and Turbo Aviation, said people in the know. Synergy Group was disqualified under Section 29A of the Insolvency and Bankruptcy Code, CNBC-TV18 has learned.

“The revised timeline for completion of the CIRP of Jet is now August 21, 2020, subject to any further extension of the lockdown by the state government of Maharashtra or the Central Government, as the case may be,” Ashish Chhawchharia, the Resolution Professional for Jet Airways said in an exchange notification earlier this month.

The airline has received claims of over Rs 37,300 crores under NCLT from various creditors. Of these, the resolution professional has admitted claims of over Rs 15,900 crores. This also includes claims of over Rs 8,000 crores from a clutch of banks led by State Bank of India, Yes Bank, Punjab National Bank and others.

Source: CNBC-TV18

BQ:Lenders Put Up Reliance Naval For Sale Under Insolvency Process

1 June 2020: Lenders of Reliance Naval and Engineering Ltd., part of Anil Ambani’s Reliance Group, have sought expressions of interest from buyers for the sale of the private shipbuilder under the Insolvency and Bankruptcy Code.

The company is currently facing insolvency proceedings at the Ahmedabad bench of the National Company Law Tribunal.

The last date for submission of EoIs is June 27, while final list of prospective resolution applicants will be issued on July 17, according to an offer notice issued by the firm’s resolution professional.

Companies with a minimum net worth of Rs 600 crore and a consolidated group turnover of at least Rs 2,000 crore can bid for the company. The eligibility for financial institutions and private equity investors is Rs 1,000 crore of minimum assets under management.

The last date for submission of resolution plan for Reliance Naval is Aug. 6. The plan is expected to be submitted to NCLT Ahmedabad for approval on Sept. 5, the offer document said.

The company is being sold to recover outstanding loans of Rs 43,587 crore. Of this, the resolution professional has admitted Rs 10,878 crore of dues of financial creditors and another Rs 32,693 crore is under verification.

Operational creditors have claimed another Rs 1,922 crore from Reliance Naval, of which only Rs 485 crore has so far been admitted by the resolution professional, the offer document stated.

Severe Headwinds

Despite having a state-of-the-art facility at Pipavav, Gujarat, Reliance Naval was facing severe headwinds since 2013 due to a lack of orders from the defence ministry. The shipyard has been in a lot of stress leading to a significant reduction in operations as compared to its capacity.

According to an analyst, Reliance Naval’s bankruptcy process will have no impact on its promoter company Reliance Infrastructure Ltd. In its audited accounts for March 2019, the company had provided for its investment in Reliance Naval.

When contacted, a Reliance Naval spokesperson declined to comment.

As per an industry expert, finding a buyer for Reliance Naval will be tough as in the past, two private shipbuilders had failed to attract any buyer under the bankruptcy process.

In the absence of any buyer, ABG shipyard with a total debt of Rs 20,000 crore and Bharti Shipyard with its Rs 13,000 crore debt had to go for liquidation.

This low interest in private shipbuilders is due to lack of orders from the government, the expert said. Lack of orders also forced Larsen & Toubro Ltd. to merge L&T Shipbuilding, including Kattupalli Shipyard, with itself last year.

Source: BloombergQuint

LM: Jet Airways receives fresh EoIs ahead of the deadline

28 May 2020: The UK-based Kalrock Capital, Hyderabad-based Turbo Aviation, Alpha Airways and Canadian citizen Siva Rasiah are among the 11 investors who have submitted expressions of interest in the beleagured airline Jet Airways. The deadline for submitting EoI was reported to end on Thursday.

The employees consortium and the South American based Synergy Group have also submitted their interest in the company.

This is the fourth attempt by the airline’s resolution professional to find a suitor for reviving the ailing company. Previously, South American conglomerate Synergy Group and New Delhi-based Prudent ARC were given time to submit a resolution plan but failed to meet the deadline.

“While we have received several interests this time, we are yet to confirm who will qualify for the second round,” said a person aware of the matter. “The timing of these bids is interesting as it comes at a time when the airline industry globally is going through the worst crisis. So we need to verify who are the serious players among them,” he added.

Jet Airways was grounded on 18 April 2019 due to acute fund crunch. On 20 June 2019, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted Jet under the Insolvency and Bankruptcy Code after lenders referred it to the bankruptcy tribunal.

The cash-strapped airline, which was grounded in April 2019, owes more than ₹8,000 crore to banks, with public sector lenders led by State Bank of India.

The resolution process for Jet Airways has been extended multiple times since the airline was admitted for insolvency resolution.

Earlier this month, fresh expressions of interest for the airline were invited and the deadline for submission was set for 28 May. The latest deadline for completion of Jet Airways’s insolvency resolution was recently extended to 21 August because of the ongoing lockdown.

In March, the National Company Law Tribunal (NCLT) had allowed 90 days’ extension for the corporate insolvency resolution process of the airline.

Despite its state of affairs, the grounded airline recently offered two of its Boeing 777 wide-body aircraft for evacuation operations of Indians stranded abroad under the Vande Bharat Mission.

Jet Airways could supply up to four aircraft for evacuation missions within a reasonable period of time, Ashish Chhawchharia, who was appointed as the resolution professional to carry out the insolvency process for the airline by lenders, wrote to corporate affairs secretary Injeti Srinivas, Mint reported.

Source: LiveMint

MC: NCLT approves IL&FS stake sale in GIFTCL to Gujarat govt

27 May 2020: The National Company Law Tribunal has approved crisis-hit IL&FS to selling its stake in Gujarat International Finance Tec-City Company (GIFTCL) to the Gujarat government. IL&FS has 50 percent stake in GIFTC.

The Gujarat government has agreed to pay a positive equity value of 100 per cent of the IL&FS stake in GIFTCL, by which, the positive equity value of over Rs 32.70 crore will come to IL&FS, according to an NCLT order.

The order said that IL&FS had sought that an amount of Rs 61.84 lakh is excluded as resolution process costs incurred for meeting various expenditures, other applicable taxes from the sale proceeds of the applicant’s shareholding in GIFTCL to the Gujarat government.

The NCLT also permitted IL&FS to withdraw a sum of Rs 3 crore from the escrow account opened to keep sale consideration for meeting the additional process resolution costs that may arise, after approval by the Board of Directors appointed by the tribunal.

“In view of the relief sought by the applicant, this bench hereby approved that sale of shares of GIFTCL held by IL&FS to Governor of State of Gujarat/Gujarat Urban Development Company Limited shall be free and clear from all encumbrances, liens, security interest and third party claims (including any statutory or tax claims) upon receipt of sale consideration from GUDC,” it said.

That sale consideration payable to IL&FS excluding resolution process costs will be credited into a designated Escrow Account intimated by the applicant and such funds will be maintained as interest bearing fixed deposits, the order added.

The National Company Law Appellate Tribunal (NCLAT) had permitted green entities to continue in accordance with the resolution framework subject to the supervision of the Justice (Retd.) D K Jain.

Since GIFTCL has been classified as a “Green” entity, IL&FS commenced the resolution process of GIFTCL.

Source: Money Control

TNIE: Patanjali Ayurved to raise Rs 250 crore through debentures

27 May 2020: Baba Ramdev-led Patanjali Ayurved plans to issue debentures worth Rs 250 crore that will be used to meet its working capital requirements and strengthen supply chain network. This would be the first-ever issuance of debentures by the Haridwar-based firm, which has emerged as one of the leading companies in the FMCG segment in recent years.

The non-convertible debentures (NCDs) will carry a coupon rate of 10.10 per cent with a tenure of three years. The maturity date is May 28, 2023. According to information, the bidding date would start on May 28 for NCDs, which would be listed on the stock exchanges and are redeemable.

“In this pandemic, demand for Ayurveda-based products, which help in boosting immunity, along with other products has gone up by three-folds. That has put constraints in our supply chain, right from manufacturing to distribution. We are raising this (fund) to strengthen this one (supply chain), so that we can smoothen our process from manufacturing to distribution,” Patanjali spokesperson SK Tijarawala told PTI.

The debenture has been rated as AA by Brickwork. Recently, several companies have announced plans to raise money from the market through debentures, as they are facing a liquidity crunch. Companies also need money to meet the costs involved in resuming their production capacity and augmenting their supply pipelines.

In December last year, the Haridwar-based group had completed the acquisition of bankrupt Ruchi Soya for Rs 4,350 crore, maker of soya food brand Nutrela through an insolvency process.

Patanjali won the bid to acquire Ruchi Soya after Adani Wilmar, which sells edible oil under the Fortune brand, withdrew from the race citing significant delays in resolution process that led to deterioration of assets.

Source: The New Indian Express

ET: NCLT clears decks for Tatas’ acquisition of Bhushan Steel

16 May 2020: The National Company Law Tribunal (NCLT) on Tuesday approved Tata Steel’s bid for Bhushan Steel Limited (BSL), clearing the deck for the bankrupt mill’s acquisition by India’s oldest maker of the primary infrastructure alloy.

The NCLT also dismissed a plea filed by the employees of Bhushan Steel opposing Tata Steel’s bid. It also rejected another petition by engineering and construction major L&T, an operational creditor to Bhushan Steel: L&T had sought priority in repayment of debt in the resolution process.

In a late evening statement Tata Steel said as per the terms of approved Resolution Plan, Bamnipal Steel Limited (`BNPL’), a wholly-owned subsidiary of Tata Steel, will initially subscribe to 72.65% equity share capital of BSL at face value i.e. at Rs 2 per share, for an aggregate amount of Rs.158.89 crore.

“The financial creditors shall receive a total consideration of Rs 35,200 crores for the settlement of the existing financial debt of BSL,” Tata Steel said. It will be funded through a combination of equity and inter-corporate loans, of which upto Rs 9,000 crore loans have an option of conversion into equity shares of BSL. The Resolution Plan also requires financial creditors to invoke pledge on existing equity shares of BSL.

“As per the approved Resolution Plan, BNPL shall be classified as the ‘promoter’ of BSL, and the existing promoters shall be de-classified as ‘promoters’ of BSL for the purposes of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” the statement added. The NCLT nod will be a shot in the arm for Tata Steel which has been allegedly facing challenges on the ground in its efforts to assert control over BSL’s main plant at Dhenkanal in Odisha.

On March 23, Tata Steel said it had accepted the letter of intent for Bhushan Steel under the corporate insolvency resolution process of the IBC after the Committee of Creditors (CoC) for BSL accepted its bid. Earlier, it had emerged as the highest bidder for Bhushan Steel with a Rs 35,200-crore offer, paving the way for the acquisition of a five million tonne plant in Odisha with a product basket catering to high-value auto and consumer durable makers.

In the race for BSL, Tata Steel had edged past JSW Steel and a private equity backed group of 400-odd Bhushan Steel employees. On March 7, Tata Steel said it had received a formal communication from the resolution professional of Bhushan Steel that it had been identified as the highest evaluated compliant resolution applicant to acquire a controlling stake in Bhushan Steel.

Following NCLT approval the only other nod that is awaited is from the Competition Commission of India (CCI). Bhushan Steel owes nearly Rs 56,000 crore to its lenders.

Acquisition of BSL will be a key element in Tata Steel’s domestic growth strategy under new Tata Sons chairman N Chandrasekaran. With Tata Steel tipped to enter into a joint venture with ThyssenKrupp of Germany for its European steel business, the focus is clearly back on growth in India.

Tata Steel’s domestic steel capacity, now at 13 million tonnes, is poised to be augmented by 5.6 million tonnes with the Bhushan Steel acquisition. Bhushan Steel makes flat products like hot- and cold-rolled coil (HR/CR coils) and galvanised sheets.

The resolution process for BSL, which was referred to NCLT in July 2017, has had its share of challenges. At the end of January, BSL promoter and vice chairman Neeraj Singhal had sought to halt the process by writing to lenders and asking them to consider restructuring the company’s debt under the sustainable structuring of stressed assets (S4A) mechanism by dividing the debt into sustainable and unsustainable parts, with no haircut.

Source: The Economic Times