Govt clears NBCC’s bid for Jaypee Infratech, SBI seeks urgent meeting of CoC

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Published: May 2, 2019 1:20:52 AM

It started on Tuesday (April 30) and will take place till Friday (May 3). Some homebuyers and members of CoC too have asked for again considering NBCC’s bid.

The overall ceiling for investments in such projects is 30% of net worth.

Following the clearance given by the finance ministry to NBCC on its revised bid for Jaypee Infratech (JIL), State Bank of India (SBI) has written to resolution professional (RP) Anuj Jain and the committee of creditors (CoC) requesting them to hold an urgent meeting on Thursday or Friday to discuss the state-owned company’s revised resolution plan.

During CoC’s last meeting on April 26, Jain had rejected NBCC’s revised bid for failing to get approvals from the Ministry of Housing and Urban Affairs (MoHUA) and the Department of Investment and Public Asset Management. NBCC also could not assure the CoC on whether an approval will be received, and if received, what conditions it might carry. It also could not offer a timeline for approvals. Legal advisors to the CoC too concurred with Jain.

In a letter to Jain and the CoC, which was seen by FE, SBI said, “In view of present development wherein NBCC has sent mail communicating approval from respective ministries for its resolution plan, the undersigned requests to call for an emergency meeting of CoC tomorrow or day after to continue discussing NBCC’s proposal and if found compliant then consider next steps accordingly under IBC 2016.”

Sources said electronic voting by CoC members on Suraksha-led consortium is taking place. It started on Tuesday (April 30) and will take place till Friday (May 3). Some homebuyers and members of CoC too have asked for again considering NBCC’s bid.

Last month, NBCC approached the MoHUA, following which the ministry wrote two letters to the Department of Expenditure (DoE), first on April 23 and second on April 30, seeking approval for JIL’s revised resolution plan. The DoE in its response said the MoHUA is competent to take decisions on appraisal and approval of the proposal to take over of JIL by NBCC.

NBCC told the DoE it has proposed an equity investment of `200 crore in JIL, which is within the 15% limit of its net worth and investments in all projects together is up to 30%. To which DoE said maharatna, navratna and mini-ratnas have been delegated powers for making investments and NBCC is a navratna company.
The department said under the government rules, the ceiling on equity investment to establish financial joint ventures and wholly owned subsidiaries in India or abroad shall be 15% of net worth of the PSU in one project, with the amount not exceeding Rs 1,000 crore. The overall ceiling for investments in such projects is 30% of net worth.

“In view of the specific enhanced delegation of power given to navratna PSUs by the government, NBCC’s proposal appears to be within specific delegation given to the company by the Department of Public Enterprise and so no concurrence of DoE to the proposal is warranted,” it added.

The DoE, however said, “The spectrum of financial implications concerning various transactions involved on account of resolution process for taking over JIL by NBCC is not very clear. It is also noted that financial figures mentioned in resolution plan are approximate and subject to change.”

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