Jaypee Infratech saga: NBCC's revised offer fails to make cut due to lack of approvals

Jaypee Infratech saga: NBCC's revised offer fails to make cut due to lack of approvals:

Due to lack of approvals by the administrative authorities, the revised plan submitted by NBCC, which is in the race to acquire embattled firm Jaypee Infratech, has been found to be non-eligible for consideration. The offer by Mumbai-based Suraksha Group was the only plan found to be compliant as per Insolvency and Bankruptcy Code norms and would now be put to vote next week, sources told Moneycontrol.

"NBCC has not backed out. They informed the CoC meeting that they did not have approvals from the government so far. They wanted that the plan should be considered without subject to approvals which cannot be done. Therefore, the NBCC plan was found to be non-compliant. Since it does not have the approval to submit the plan, their plan cannot be considered to be legally compliant. Therefore, as far as the NBCC plan is concerned it cannot be considered by the CoC,” sources said, adding it was therefore decided that the Suraksha offer was the only compliant plan and would be put to vote on April 29. .

Sources said that the revised offer submitted by NBCC had said that it had applied to its administrative authorities  that include Niti Aayog, Department of Investment and Public Asset Management, Ministry of Finance and Ministry of Housing and Urban Affairs for their approval. It had also stated that NBCC had the right to amend, modify or supplement the resolution plan in terms of such approvals, prior to the submission of the resolution plan before the adjudicating authority.

NBCC and Suraksha, which are in the race to acquire the Jaypee Group firm, were asked by the lenders to sweeten their offers and both the potential buyers have submitted their revised offers under the Insolvency and Bankruptcy Code (IBC).

Lenders of debt-ridden Jaypee Infratech met on April 26 to discuss revised bids submitted by state-owned NBCC and Suraksha Realty to acquire the realty firm and complete over 20,000 delayed apartments in Noida.

"Revised resolution plans have been received from NBCC and Suraksha Realty-led consortium and will be placed for discussion amongst CoC (committee of creditors) members on resolution plans received from resolution applicants in the meetings to be held on April 26 and April 30, respectively," Jaypee Infratech Interim Resolution Professional (IRP) Anuj Jain had said in a regulatory filing on April 25.

In its previous bid, NBCC had offered 1400 acres of land worth Rs 6,000 crore and equity infusion of Rs 500 crore upfront. In the revised bid, it has offered 950 acres of land worth Rs 5,001 crore and reduced the equity infusion from  Rs 500 crore to Rs 200 crore, sources said.

For secured financial creditors, it has offered a payment of upfront amount of Rs 1500 crore, 100 percent in Yamuna Expressway SPV, 100 percent in land bank SPV. The land bank SPV is worth Rs 5001 crore and totals 950 acres

Suraksha had earlier offered about Rs 20 crore as upfront payment but in the revised bid, it has proposed an equity infusion of Rs 50 crore and a working capital loan of Rs 3000 crore against a requirement of Rs 2404 crore to complete construction work, sources said, adding their completion timelines are on an average one year less than NBCC.

Sources also said that fresh bids may have to be invited if the Suraksha bid does not go through. But that can happen only if extension is granted by NCLT. The 27-day deadline under IBC ends on May 27.

Business conglomerate Adani Group had also entered the fray by putting in a bid to acquire Jaypee Infratech.

The National Company Law Tribunal (NCLT) in 2017 had admitted the application of a consortium led by IDBI Bank seeking resolution of Jaypee Infratech, and appointed Anuj Jain as the insolvency resolution professional (IRP) to manage the company's business and invite bids from investors.

In the first attempt under the insolvency process, lenders had rejected the Rs 7,350 crore bid of Lakshdeep, part of Suraksha Group, as they found it to be substantially lower than the company's net worth and assets.

Therefore, the IRP in October 2018 started a fresh initiative to revive Jaypee Infratech.

Last week, promoter of embattled real estate firm Jaypee Infratech Manoj Gaur had once again offered to complete the much-delayed real estate projects within a period of four year by pumping in Rs 1500 crore in an escrow account but homebuyers were skeptical and termed the meeting held on Friday as an ‘eyewash’, ‘old wine in new bottle’ and questioned the timing of the meeting saying that the meeting was called to garner support from buyers whose approval is required for any resolution plan or settlement plan to go through.

Gaur during the meeting with Jaypee Greens Noida homebuyers claimed that he was a ‘victim of circumstances’, made a presentation and proposed that Rs 1500 crore would be set aside in an escrow account for completion and construction of the projects that are proposed to be completed within four years.

Briefing reporters on the sidelines of the meeting, Ajit Kumar, adviser Jaypee Group, said that the company is aware of the problem faced by homebuyers. “We have submitted a proposal under Sec 12A of the IBC procedure in April. To begin with, we will set aside Rs 1500 crore in an escrow account, which will be monitored by a committee. The entire amount will be used for construction and completion of the houses. The monitoring committee would constitute a  retired judge of a Supreme Court, a technical member and I will be the convenor, he had said.

As many as 22,000 homebuyers are stuck because of significant delay in delivery of flats by Jaypee Greens group's debt-ridden firm Jaypee Infratech, which is undergoing insolvency proceedings.

The realty firm has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI Bank. Other lenders are IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance.

Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 units. JAL had deposited Rs 750 crore in the registry of the Supreme Court for refund to buyers. However, this amount was transferred to the NCLT as per an order of the apex court.

Source : moneycontrol.com

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NBCC to submit revised bid to acquire Jaypee Infratech by April 25

NBCC and Suraksha Group are in race to acquire bankruptcy-bound realty firm Jaypee Infratech.

State-owned NBCC Ltd is likely to submit revised bid by April 25 for acquiring debt-ridden Jaypee Infratech and complete the housing projects. Lenders of Jaypee Infratech met Tuesday here and asked NBCC to submit their plan by April 25 as requested by the public sector firm, sources said.

NBCC and Suraksha Group are in race to acquire bankruptcy-bound realty firm Jaypee Infratech. Separately, Jaypee group promoters have submitted over Rs 10,000 crore offer to settle lenders debt and complete projects but the same is not being considered.

In the last meeting, the committee of creditors (CoC) had asked both NBCC and Suraksha to sweeten their offer.

NBCC had even suggested that it was ready to work as project management consultant and charge fees for completing the stalled projects.

In its earlier resolution plan, NBCC offered 1,400 acre land worth Rs 6,000 crore as well as Yamuna Expressway to lenders.

It had proposed that banks should raise about Rs 2,000 crore against the expressway and provide half of the amount (Rs 1,000 crore) to the state-owned company, which would utilise the fund as an upfront payment.

NBCC had offered to fund the gap of about Rs 1,500 crore between estimated construction cost and receivables from customers.

In contrast, Suraksha Group made an offer of about Rs 20 crore as an upfront payment and land worth Rs 5,000 crore, sources had said. The Mumbai-based group promised to complete the pending projects in three years.

The National Company Law Tribunal (NCLT) in 2017 had admitted the application of a consortium led by IDBI Bank seeking resolution of Jaypee Infratech, and appointed Anuj Jain as the insolvency resolution professional (IRP) to manage the company's business and invite bids from investors.

In the first attempt under the insolvency process, lenders had rejected the Rs 7,350 crore bid of Lakshdeep, part of Suraksha Group, as they found it to be substantially lower than the company's net worth and assets.

Therefore, the IRP in October 2018 started a fresh initiative to revive Jaypee Infratech.

The realty firm has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI Bank. Other lenders are IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance.

Jaypee Infratech is developing about 32,000 flats at Jaypee Greens Wish Town, of which it has delivered 9,500 units. JAL had deposited Rs 750 crore in the registry of the Supreme Court for refund to buyers. However, this amount was transferred to the NCLT as per an order of the apex court.

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Buyer can't wait indefinitely for flat, says Supreme Court

NEW DELHI: The Supreme Court has upheld orders of a state consumer commission and the national commission to refund payment with interest to a homebuyer for over seven years' delay in handing over possession of the flat he had booked with a Kolkata-based builder. The court said a buyer cannot be required to wait indefinitely for possession of his house.

A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the relief sought before the state consumer disputes redressal commission," a bench comprising Justice DY Chandrachud and Justice Hemant Mehta said while hearing a case filed by the builder, Kolkata West International City Pvt Ltd, against the order for refund passed by the state and national consumer commissions.

The SC pronounced the verdict last Monday. Welcoming the order, an umbrella association of home buyers - Fight for RERA tweeted, "Landmark judgment from Hon'ble Supreme Court on refund to buyer from developer. Hope this will set at rest arbitrary orders being passed by RERA authorities denying refunds on their own despite #RERA provision there for refunds."

In this case, one Devasis Rudra had paid Rs 39.29 lakh in 2006 to the builder and as per the agreement the house was to be handed over by December 31, 2008 and there was a grace period of six months. But the house was not handed over on time.

In 2011, Rudra filed a complaint before state consumer commission seeking possession of the house or refund of the amount he had paid with 12 per cent annual interest. He also sought compensation of Rs 20 lakh. The state commission directed the developer to refund the money with interest at 12 per cent and compensation of Rs 5 lakh. When the builder challenged the order in the National Commission Disputes Redressal Commission (NCDRC), it reduced the compensation amount to Rs 2 lakh while upholding the rest of the state commission's order.

Giving its verdict on whether the buyer was entitled to seek refund or was barred from doing so, having claimed compensation as the primary relief in the complaint, the bench said, "Even in 2011, when the buyer filed a complaint, he was ready and willing to accept possession. It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession."

While participating in recent RERA workshops organised by the, some of the regulators had announced that they were not allowing refund in certain cases to ensure that the projects get completed. They had also pushed for barring home buyers from approaching consumer forums since these entities often pass order for refund and don't consider the implications on completion of projects.

Project on Noida Expressway sector 108 Noida Parx Laureate .

Jaypee Greens Wish Town Noida

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