Once bitten, JSW wants formal nod from banks to takeover Jaypee Infra

JSW lost out in race of Binani Cement despite highest offer

JSW Group, which has emerged as the highest bidder for Jaypee Infratech’s real estate assets, is waiting for a formal communication from the banks as it lost out in the race for stressed assets even after emerging as the highest bidder in other companies. The JSW group company, JSW Cement was pipped by Birla owned Ultratech after JSW emerged as the highest bidder in the first round of bidding for Binani Cement but the resolution professionals called for second round of bids.

“Everything is ad hoc and there is too much of confusion regarding the interpretation of the Insolvency and Bankruptcy code 2016. The highest bid is no guarantee that the stressed asset will be offered to that company,” said one of the bidder asking not to be quoted.

Jaypee Infratech stock was up 5 per cent to Rs 13.69 a share during afternoon trades. JSW group has offered Rs 99 billion for Jaypee Infratech as one-time payment as compared to Jaypee's outstanding debt of Rs 90 billion, as of March 2017.

JSW Steel lost out in the race for Bhushan Steel and Bhushan Power and Steel, as well as Tata Steel, offered far better offer to the lenders. But the company won Monnet Ispat as it was the lone bidder for the company. JSW Steel said it will bid for Uttam Galva Steel which is sent to the National Corporate Law Tribunal for resolution of debt after Uttam failed to repay its loans.  

JSW officials said they are keen to take over Jaypee Infratech which has defaulted to both banks and flat owners who have dragged the company to Supreme Court for failing to give possession of the apartments. As sales slumped and the once-hot market of real estate collapsed — leaving many companies grappling with debt and angry customers.

Apart from JSW, the other bidders of Jaypee Infratech include Tata, Vedanta and the Lodha group. But as the case of Jaypee Infratech is also pending in the Supreme Court but on February 5th, the Supreme Court did not stay the bidding process.

Jaypee had told the SC that it had deposited Rs 5.5 billion with the court against its dues of Rs 200 billion to protect the small home buyers. This was against claims of Rs 11.5 billion received from the home buyers. The SC had earlier restrained independent directors and promoters of Jaypee group from transferring any assets without its permission. The court had also warned that they will be held for criminal prosecution or contempt of court if found in violation of the order.