Financial creditors of embattled Jaypee Infratech have decided to give more time to state-owned NBCC and Suraksha group to submit their final bids to acquire the realty firm through the insolvency process.
The two-day voting process, which began on May 27, to decide whether a further extension should be given to both the contenders concluded on Friday evening.
Sources said that members representing 98.54 per cent of the voting rights gave their assent to the proposal to provide a final opportunity to both the resolution applicants to submit their revised bids.
The deadline for submission of the final bids is June 4 and resolution plans should be compliant with insolvency law and a Supreme Court judgement on March 24, they added.
Over 20,000 homebuyers have 56.61 per cent voting rights in the Committee of Creditors (CoC) and that of Fixed Deposit Holders is 0.13 per cent, while 13 banks have 43.26 per cent voting share.
In its meeting held on May 24, the CoC of Jaypee Infratech Ltd (JIL) decided to defer the voting process on the Suraksha group’s bid.
The panel decided to conduct voting on May 27-28 for allowing both NBCC and Suraksha to submit their final offers.
Protesting against its bid being declared as non-compliant, NBCC had last week written a strong letter to the Interim Resolution Professional (IRP) Anuj Jain and also submitted a 14-page addendum to its final bid to clarify concerns raised on the treatment of dissenting creditors.
Many lenders, including SBI and IDBI, asked the IRP to call another meeting of the CoC to discuss NBCC’s matter. Accordingly, the CoC meeting was called on May 24 at 10 am for ratification and discussion on NBCC’s addendum.
The IRP had submitted its report on the NBCC’s addendum and found that bid was still non-compliant despite clarifications.
In the meeting held on May 20, the CoC had rejected NBCC’s plan as the offer was found non-compliant to certain provisions of laws.
Earlier this week, NBCC asserted that its bid is “legally compliant” but said the company will try to address the objections raised by the IRP if allowed to submit fresh bids.
NBCC had said that homebuyers should not suffer because of the differences in legal interpretation of provisions related to dissenting financial creditors.
This is the fourth round of the bidding process in the matter of JIL bankruptcy case.
JIL went into the insolvency process in August 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium.
In the first round of insolvency proceeding, the Rs 7,350-crore bid of Lakshadweep, part of Suraksha Group, was rejected by lenders.
The CoC had rejected the bids of Suraksha Realty and NBCC in the second round held in May-June 2019.
The matter reached the National Company Law Appellate Tribunal (NCLAT) and then the apex court. In November 2019, the Supreme Court directed the completion of JIL insolvency process within 90 days and ordered that the revised bids be invited only from NBCC and Suraksha.
In December 2019, the CoC approved the resolution plan of NBCC with a 97.36 per cent vote in favour during the third round of the bidding process. In March 2020, NBCC had got approval from the NCLT to acquire JIL.
However, the order was challenged before the NCLAT and later in the Supreme Court, which on March 24 this year, ordered that fresh bids should be invited only from NBCC and Suraksha.
The apex court had also directed that the resolution process be completed in 45 days, which lapsed on May 8 and an application has been filed to extend the timeline for finding a buyer for JIL.
Source: Business-Standard