Mapping insolvency: Lenders of Jaypee Infratech reject Lakshadweep offer

Jaypee Infratech is one of the first 12 major insolvency cases that the RBI had directed banks to take to the NCLT under the IBC

The lenders to insolvent Jaypee Infratech have rejected Lakshadweep Pvt Ltd’s resolution plan.

Lakshadweep, chosen by the Committee of Creditors (CoC) as the highest bidder, had offered to buy the realty company for a Rs 28-billion loan dues writeoff. 

It had offered to give possession to stranded home buyers in Jaypee's projects by 2024.

Sources said 94 per cent of the lenders rejected the plan. Lakshadweep is a joint venture between Suraksha Asset Reconstruction Company and Mumbai-based Dosti Realty.

The Supreme Court had earlier asked a “competent authority” to hear Jaypee’s proposal for regaining control of the real estate arm. It had also told Jaypee Infratech to deposit money if the  home buyers needed to be compensated. 

Jaypee Infratech had deposited Rs 7.5 bn to the SC after the order.

As many as 32,000 homebuyers are yet to get possession of their flats in Jaypee projects. The company’s insolvency Resolution Professional will present the case of rejection to the National Company Law Tribunal (NCLT) in Allahabad.   

Jaypee Infratech is one of the first 12 major insolvency cases that the Reserve Bank of India had directed banks to take to the NCLT under the Insolvency and Bankruptcy Code.