The wait for the 25,000-odd homebuyers of the beleaguered Jaypee Group projects is set to become longer.
According to a BSE filing by Jaypee Infratech, the offer of the Suraksha Realty-led consortium, the only player left in the race to acquire Jaypee Infratech, has been rejected by the Committee of Creditors (CoC) after it was not able to get the 66 per cent votes required to get the go-ahead.
According to the filing, only 23.47 per cent of the votes were in favour of Suraksha while 41.85 per cent were against giving Jaypee Infratech projects to them. The rest abstained from voting. Almost none of the banks voted in favour of Suraksha’s plans, a closer look at the Jaypee filing shows.
“Since the members representing 23.47 per cent of the voting rights assented to the matter, the decision on the item stands rejected,” the papers on Voting Results for the Ninth Meeting of the Committee of Creditors (CoC) of Jaypee Infratech Ltd submitted in the BSE stated.
Voting on the issue started on April 30 for banks and financial institutions as well as homebuyers and fixed-deposit holders. The process ended on May 3.
According to sources close to the matter, in the worst-case scenario if the insolvency resolution professional (IRP) does not come up with any plan, Jaypee Infratech might head for liquidation. If that happens homebuyers are in the danger of not getting their apartments.
However, sources close to the CoC are certain that Jaypee Infratech projects will now head for a third round of bidding.
This would allow not only state-run NBCC to participate in bidding but also give a chance to the promoters of Jaypee Group as well as Adani Group to throw their hat in the ring to grab the project, worth over Rs 8,000 crore.
The rejection of Suraksha’s bid has effectively removed all chances of starting work in 2019, according to the people close to the process.
“Last time it took almost nine months to come to the process of voting on a firm. Now again fresh bids will be called and this would stretch the process as new bidders are planning to join the race. This means until at least the end of this year, work on Jaypee sites might not start,” said Pankaj Gupta, who in 2010 gave the down payment in Jaypee Wish Town’s Kensington Park Apartment project.
NBCC the top choice of home-buyers
The homebuyers fear things are again going off the hinge in the way they did almost eight years ago.
NBCC, which has had extensive discussions with homebuyers, was their obvious choice.
However, it was not allowed to take part in the present round of bidding because it did not have the permission to do so.
Fears that NBCC might not bag the project are so high that homebuyers have written more than a thousand letters to the prime minister, finance minister and urban development minister.
“Knowing very well that there is overwhelming support from both banks and homebuyers to NBCC’s proposal, the IRP, Anuj Jain, did not put the NBCC proposal to vote on the grounds that it did not have the finance ministry’s permission. “But it is evident from the finance ministry note that NBCC had those permissions,” said Manish Goyal, a homebuyer, in his letter to the prime minister.
Others said the voting process was sabotaged. “Just before voting commenced, all the passwords of homebuyers were erased. The process was stopped and resumed after a nine-hour delay,” said Dharmendra Kumar, another homebuyer, in his letter to the PM.
Business Standard has reviewed the letters. However, the veracity of these allegations could not be independently ascertained.
Jaypee promoters trying to win back confidence
In emails as well as meetings with homebuyers, the Jaypee promoters are trying to win back customer confidence.
“The ongoing process for over 18 months has allowed work at snail’s pace but it is essential that the matter gets resolved, incomplete homes are completed and delivered in a time-bound manner, which alone can mitigate anguish and pain caused to you. I am aware of your unhappiness yet feel responsible to share the road map which we believe would surely address your concern and can be the path which shall pave the way for resolution of this subject despite certain reservations,” Manoj Gaur as executive chairman and chief executive officer of the beleaguered company said in an email to homebuyers.