Long wait for banks and homeowners on Jaypee Infra debt resolution

CoC to vote on NBCC's offer today

Even as the Committee of Creditors of Jaypee Infratech votes on Thursday on whether or not to give a second chance to NBCC India to make a bid, the entire Rs 22,000 crore debt resolution process of the Delhi company is set for yet another delay, hitting the lenders and homeowners hard.

Interestingly, both homeowners and lenders have been waiting for the resolution of the company since August 2017 when the company was sent to the National Company Law Tribunal (NCLT) after it defaulted on loans. Since then, Suraksha group and NBCC emerged as the final bidder for the company and last week Suraksha Group’s offer was to go for voting from Monday. But on Monday, the CoC decided to give another chance to NBCC despite the fact that its offer was found non-compliant by the resolution professional.

Senior bankers said most of the public sector banks are wanting the JIL resolution and, as the Supreme Court has said, liquidation is not an option in its order on August 9, 2018, they are expecting resolution soon. “But due to NBCC getting yet another chance, we fear that the process will get delayed again,” said a senior banker.

Bankers said if homebuyers decide to put only the Suraksha plan to vote then they would be keen to assent as after several rounds the Suraksha plan is financially better and compliant. “The homeowners have 57 per cent voting power in the CoC and they can decide on whether to give another opportunity to NBCC or not,” he said. “But no one wants uncertainty or further delay".

Suraksha Group has already warned that the delay is testing its patience and would withdraw from the process. “We are heading towards uncertainty yet again. In case homebuyers choose to extend the process, everything will start afresh as both bidders will submit their plan in seven days again, thereafter negotiations, evaluation, compliance check, finalisation all will be done afresh. In this case we are likely to cross another 30 days and chances of litigation would increase from the company which has lost the race,” the banker said.

Though there was intervention from the Indian government asking to give another chance to NBCC, a government source said they wants homebuyers to get homes in time as per the SC guidelines. In March 24th this year, the SC has given 45 days to the CoC to complete the process but this deadline will lapse and the CoC plans to seek additional time from the top court.

Jaypee Infratech owns huge tracts of land on both sides of the Delhi-Agra Yamuna Expressway, apart from the expressway itself. Suraksha had offered Rs 6,984 crore to all the creditors, while NBCC had offered Rs 5,284 crore. As there were several conditions to NBCC’s offer, including zero coupon, 21-year tenure of NCDs, its offer was rejected by private banks.