Insolvency bound realty developer Jaypee Infratech’s Committee of Creditors (CoC) has termed state-run NBCC’s bid for the company non-compliant with the code, as interpreted by the Supreme Court’s recent judgment, with regards to payment to dissenting financial creditors (DFC), said persons familiar with the development.
Following this, Suraksha Group’s resolution plan – the sole compliant proposal for the company’s takeover – will be put to vote-seeking homebuyers’ and lenders’ consent. The voting will be on starting from Monday, May 24 and close on Thursday, May 27 evening.
“One of the public sector banks, which is part of the lender’s consortium, was seeking to push the resolution professional to put NBCC’s non-compliant plan for the voting. However, other lenders and IRP did agree to do so,” said one of the CoC members who attended the seven-hour long meeting on Thursday.
In its revised plan, NBCC had proposed to offer non-convertible debentures worth Rs 2,000 crore and or land to DFCs if the entire liquidation value payable to them is not realized from enforcement of security interest.
According to the Supreme Court’s judgment on March 24, the bidder can only offer cash or allow enforcement of their existing exclusive security interest.
NBCC has also offered to assent lenders 85% ownership of the expressway SPV, which will be raising NCDs up to Rs 4,200 crore – a fresh debt of Rs 2,000 crore, Jaypee Infra Ltd (JIL) NCDs worth Rs 200 crore and Rs 2,000 crore NCDs for DFCs, that would have made assenting lenders effective borrowers.
On Wednesday, Suraksha Asset Reconstruction Company had written to the CoC and the Insolvency Resolution Professional about the process and compliance.
Suraksha has proposed to offer Rs 6,984 crore to lenders, while NBCC had offered Rs 5,248 crore to them, showed a fair market valuation report. Suraksha has also offered land worth Rs 400 crore to homebuyers for the past delays. Both proposed to complete the stuck projects in 42 months. This was the fourth time both the entities had revised their plans.
Suraksha Group has proposed to raise Rs 3,000 crore as working capital within 90 days, while NBCC had stated its plan to raise Rs 2,000 crore without specifying any timeframe for the same. NBCC had offered to make payment to refund-seeking homebuyers in four years and Suraksha has proposed to repay them in 18 months.
Around 20,000 home buyers have been waiting to get delivery of their homes following the Allahabad bench of the NCLT 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 had admitted the application of an IDBI Bank-led consortium seeking resolution of Jaypee Infratech’s debt under the Insolvency & Bankruptcy Code. Jaypee Infratech has a debt obligation of over Rs 9,800 crores to the IDBI Bank-led consortium. Homebuyers’ claims amount to Rs 12,714 crore. The admitted financial debt out of the total claims filed by the creditors is Rs 22,613 crore.
