The National Company Law Tribunal (NCLT) on Tuesday approved a proposal of state-run NBCCNSE 0.00 % (India) to acquire bankrupt realty developer Jaypee Infratech.
Resolution of Jaypee Infratech’s bankruptcy case will provide relief to around 20,000 homebuyers in the company’s residential projects in Noida and Greater Noida. In its bid, NBCC had proposed to complete these stuck projects.
The NCLT has ordered that Rs 750 crore that Jaypee Infratech’s parent, Jaiprakash Associates, had deposited with Supreme Court registry would be part of the resolution plan. NBCC had put in a condition that it would withdraw from the process in case the money was not transferred to it.
According to people aware of the matter, two special purpose vehicles would be formed to complete the construction work. Representatives of lenders and homebuyers would be part of it. Construction work is expected to commence in the next six months, they said.
“The NCLT has ruled that Rs 750 crore is part of the resolution plan and has approved NBCC’s resolution plan with some modifications,” said one of the people.
Jaypee Infratech had total debt of Rs 9,800 crore to a consortium of lenders led by IDBI Bank.
NBCC has sought around three months’ time to raise money, hire agencies for various work and for other formalities.
Jaypee Infratech went into the insolvency process in August 2017.
On December 18, its Committee of Creditors (CoC) selected NBCC as the winner to acquire the company with 97.36% of the votes. The other contender was Suraksha Realty.
In the first round of insolvency proceedings conducted last year, a Rs 7,350 crore bid from Lakshadweep, part of the Suraksha Group, was rejected by lenders. They rejected the bids of Suraksha Realty and NBCC in the second round held in May-June 2019.
On November 6, 2019, the Supreme Court directed completion of the insolvency process within 90 days. It ordered to invite revised resolution plans only from NBCC and Suraksha Realty.
Law firm Cyril Amarchand is representing the lenders, including the homebuyers in the case.
Source: Economic Times