Insolvency: Promoters submit Rs 100 bn revival plan for Jaypee Infratech

Jaypee group chairman Manoj Gaur made a fresh effort to gain back control of Jaypee Infratech — a real estate company for which another firm has already been named the highest bidder under the ongoing insolvency proceedings. 

In its resolution plan, submitted to the committee of creditors (CoC) and the resolution professional, Gaur promised a marginal haircut to Jaypee Infratech lenders and minority shareholders and possession of homes by 2021. Lakshadweep Pvt Ltd — the firm CoC has chosen as the highest bidder — has offered to give possession to the homebuyers by 2024. Lakshadweep a joint venture of Suraksha Asset Reconstruction Company and Mumbai-based Dosti Realty.

The CoC will vote on Lakshadweep’s resolution plan on Tuesday. If Lakshadweep’s bid is approved, the resolution plans by both Jaypee and Lakshadweep are likely to be put before the Supreme Court (SC), sources said. 
 

The SC had earlier asked a “competent authority” to hear Jaypee’s proposal to regain control of the real estate arm. It had also asked Jaypee Infratech to submit an amount with the SC, in case the homebuyers need to be compensated. Jaypee Infratech had submitted Rs 7.5 billion to the SC after the order.

In its resolution plan, Jaypee has offered a haircut of Rs 2.3 billion to the lenders, while Lakshadweep has offered to buy the realty firm at a hair cut of Rs 28 billion. 

It has also offered homebuyers 2,000 equity shares each in Jaypee Infratech, sources said. As many as 32,000 homebuyers are yet to get possession of flats. A 50 per cent discount on stamp duty and free maintenance are also in the offing, sources said. 

Lakshadweep is arranging a loan of Rs 40 billion from banks and writing down existing equity to the extent of 99.99 per cent. The Jaypee group, on the other hand, has said it would arrange Rs 27 billion through toll monetisation and Rs 10 billion through additional working capital, sources said. 

While Lakshadweep promised an upfront payment of around Rs 20.29 billion, the Jaypee group has proposed to pay Rs 12.55 billion.

As for operational creditors, the Jaypee group plan proposes to pay around Rs 4 billion as opposed to a waiver sought by Lakshwadeep, sources said.