Jaiprakash Associates

Jaypee lenders start negotiations on NBCC’s bid as per NCLAT order

Jaypee lenders start negotiations on NBCC’s bid as per NCLAT order

May 24, 2019 in Jaiprakash Associates

State-owned NBCC is unlikely to dilute certain conditions, including exemption from tax liability, in its offer for debt-laden Jaypee Infratech but is ready to negotiate on the proposal related to unsold flats, sources said.
Jaypee Infratech’s lenders have started negotiations with NBCC on the latter’s bid to acquire the realty firm.
Last week, the National Company Law Appellate Tribunal (NCLAT) had annulled voting by homebuyers and lenders on NBCC’s bid and allowed renegotiation on the offer by May 30. Voting process could start from May 31.
According to sources, lenders have shown reluctance to acquire up to 2,207 unsold flats worth Rs 1,756 crore as proposed by NBCC in its revised offer.
NBCC is ready to negotiate on its proposal related to unsold flats, they added.
However, sources said NBCC is unlikely to dilute its conditions related to exemption of tax liabilities.
In its revised offer, NBCC proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.
Last week, the Committee of Creditors (CoC) decided to put on vote the revised offer of NBCC, with homebuyers favouring the voting process while bankers dissenting.
Lenders had written to the NBCC seeking clarifications on certain concessions sought 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 Interim Resolution Professional (IRP) flagging to the lenders that NBCC’s bid was conditional and non-binding.
The IRP Anuj 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, were taken.
Jaypee Infratech went into insolvency process in 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium seeking resolution of the realty firm.
In the first round of insolvency proceedings, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
Later in October 2018, the IRP started the second round of bidding process to revive Jaypee Infratech on the direction of NCLT.
Earlier this month, creditors, including banks and homebuyers, rejected a bid by Mumbai-based Suraksha Realty through a voting process, following which the CoC decided to consider NBCC’s offer.

Sources: realty.economictimes.indiatimes.com

Homebuyers in SC to stay process of Jaypee Infratech’s dissolution

Homebuyers in SC to stay process of Jaypee Infratech’s dissolution

May 8, 2019 in Jaiprakash Associates

NEW DELHI: Fearing liquidation proceedings as the insolvency resolution process for debt-ridden real estate giant Jaypee Infratech Ltd (JIL) could not be completed within the statutory lime period of 270 days, hundred of homebuyers approached the Supreme Court seeking to stop the dissolution process.
The apex court had in August last year ordered commencement of insolvency proceedings afresh against JIL before the National Company Law Tribunal, Allahabad, and asked the interim resolution professional (IRP) to seek fresh bids from other companies to take over the realtor.
Under the Insolvency and Bankruptcy Act, corporate insolvency resolution process must be completed within 270 days and in case of failure, liquidation starts.
As the time limit of 270 days ended on May 6, the homebuyers rushed to SC through advocate Ashwarya Sinha to stay the liquidation process. Though the NCLT in Allahabad has posted the matter for May 21, providing some breathing space to investors and likely bidders, the uncertainty has forced homebuyers to move the Supreme Court seeking protection of their interests.
“If no resolution plan is accepted till May 6 (the date has now passed), JIL will automatically go into liquidation, thereby leaving thousands of homebuyers in the lurch. Liquidation of the company will only be in the interest of banks who will be able to recover the money lent by them to the debtor,” the petition said.
It said liquidation would defeat the purpose of safeguarding the interest of 32,000 homebuyers who had paid around Rs 14,000 crore to JIL. “The provisions stipulate that in case of distribution of the proceeds, secured creditors will be given preference over an unsecured creditor. However, since no amendments have been brought forth in the definition of secured creditors to include homebuyers, they continue to be regarded as unsecured creditors,” it said. Meanwhile, one of the creditor banks IDBI moved an application before NCLT, Allahabad, for extension of time to allow insolvency proceedings to go on that has resulted in the case being scheduled for May 21.
Citing Amrapali and Unitech cases, in which forensic auditing of the companies was ordered, homebuyers pleaded for a similar order against Jaypee to track diversion of funds which sparked financial issues.

Sources: realty.economictimes.indiatimes.com

Supreme Court asks Jaiprakash Associates Ltd to deposit Rs 200 crore

Supreme Court asks Jaiprakash Associates Ltd to deposit Rs 200 crore

March 26, 2018 in Jaiprakash Associates, Real Estate News

The Supreme Court on Wednesday asked the embattled realty firm Jaiprakash Associates Limited (JAL) to deposit Rs 200 crore in two instalments by May 10.
The bench headed by Chief Justice Dipak Misra asked the real-estate major to deposit Rs 100 crore by April 6 and the rest by May 10.

The bench, comprising justices A M Khanwilkar and D Y Chandrachud, also asked the firm not to send any notices for default in the payment of EMIs to home buyers who have opted for the refund.

The top court asked JAL to submit a project-wise chart of home buyers seeking refund so that the amount can be dispersed on pro-rata basis.

“At present we are concerned with the refund and will take later the issue raised by home buyers who want delivery of flats,” the top court said.
Meanwhile, JAL informed the apex court that only eight percent of 31,000 home buyers have opted for the refund and the rest want possession of flats. The firm also told the court that it has received/sought occupation certificate with regard to 13,500 flats so far in 2017-18.

The firm had on January 25 deposited Rs 125 crore in the Supreme Court after being directed to do so to safeguard the interests of home buyers. The top court had on January 10 directed JAL, the holding firm of Jaypee Infratech Ltd (JIL), to provide details of its housing projects in the country, saying home buyers should either get their houses or their money back.

It had refused to accord urgent hearing on a plea of the Reserve Bank of India seeking its nod to initiate insolvency proceedings before the National Company Law Tribunal (NCLT) against JAL, saying it would be dealt with at a later stage.

Sources: Times of India

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