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Jaypee Infratech creditors to vote on NBCC's revised bid; NCLAT refuses to stay voting process

Press Trust of India  |  New Delhi 

The creditors' panel of debt-laden Tuesday decided to vote on the revised offer of as more than 20,000 favoured the voting process for the state-run firm's bid even as bankers dissented, sources said.

The voting process would start on Thursday and end on Sunday, sources said, adding that the results would be declared on May 20.

Bankers who participated in the (CoC) meet here on Tuesday opposed putting the bid to vote and pitched for further negotiations.

Soon after the CoC decided to put to vote the bid, banks made a plea before the for a stay on the voting process. However, the NCLAT refused to stay voting by the creditors.

A two-member NCLAT bench headed by Justice S J Mukhopadhaya warned banks that they would get "zero rupees" if the process is stalled. Justice Mukhopadhaya said the interest of thousands of home-buyers was of prime importance and the matter needed to be resolved even if there is just one bidder.

During the CoC meeting, bankers also proposed that they would take control of and rope in as (PMC) to complete over 20,000 delayed flats, sources said.

The opposition to the revised bid also comes against the backdrop of on Monday ruling out dilution of certain conditions, including exemption from tax liability, in its revised offer.

However, sources said struck a different note.

Kuldeep Verma, who represents in the CoC, wanted offer to be put to vote without any delay. He also informed the committee that thousands of home buyers have intimated him that they are in favour of voting on the revised bid, sources added.

According to the sources, Verma's views prevailed as home buyers have nearly 60 per cent voting rights in the CoC but bankers expressed their dissent.

A minimum 66 per cent vote of financial creditors (bankers and homebuyers) is required for the approval of any resolution plan.

Jaypee Infratech's Interim Resolution Professional (IRP) too favoured voting process for the revised offer.

Majority of homebuyers are likely to vote in favour of NBCC bid but many also fear that lenders may reject it and opt for liquidation as they do not want to take up to 60 per cent hair-cut against their claim of Rs 9,782 crore, sources said.

The CoC is considering NBCC's revised offer after it rejected Mumbai-based Suraksha Realty's bid on May 3, through voting process.

Earlier, the creditors' panel did not allow vote on NBCC's bid citing lack of approvals from the government departments. NBCC later got all the necessary clearances.

In its revised offer, NBCC has proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore to banks and completing construction of flats by July 2023 to settle an outstanding claim of Rs 23,723 crore of financial creditors.

Last week, lenders had written to NBCC seeking clarifications on certain relief and concessions put forward by the public sector firm in its resolution plan.

However, NBCC decided not to dilute the conditions of exemption from income tax liability as well as from taking consent of development authorities for transfer of businesses.

Clarifications from the NBCC were sought in the wake of the IRP flagging to the lenders that NBCC's bid was conditional and non-binding.

Jain had written to the CoC that NBCC's revised bid was conditional as the plan would not be binding unless key relief measures such as extinguishing of income tax liability and exemption from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer.

The court-mandated deadline for completing the resolution plan for Japyee Infratech ended on May 6, and the CoC has sought an extension of the deadline.

Apart from NBCC, has shown interest to bid for but creditors have not sought resolution plan from Adani so far.

Interestingly, Jaypee Group's promoters too have put in a bid, under Section 12A of Insolvency and Code, to retain control of the company.

In 2017, Jaypee Infratech went into insolvency after the (NCLT) admitted the application by an IDBI Bank-led consortium seeking resolution of the firm.

During the first round of insolvency proceedings, the Rs 7,350 crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.

In October 2018, the IRP started a fresh initiative to revive Jaypee Infratech on the NCLT direction.

(JAL), the promoter of Jaypee Infratech, had submitted Rs 750 crore in the registry of the for the refund to buyers and the amount is lying with the NCLT.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 14 2019. 20:46 IST