Insolvency process: Here is why Lakshadweep bid for Jaypee Infra may be rejected

By: | Published: May 4, 2018 3:53 AM

A committee of creditors will meet on May 7 to consider Lakshadweep Pvt Ltd’s bid for the embattled real estate developer Jaypee Infratech and they will e-vote on the proposal on May 8. However, sources indicated that the lenders might not approve the proposal as they “are not pleased with the subdued bid value.”

jaypee, jaypee infra, insolvency, bankruptcyOn August 9 last year, the Allahabad bench of the National Company Law Tribunal had accepted lender IDBI Bank’s plea and admitted Jaypee Infratech as a case under insolvency resolution for defaulting Rs 526 crore.

A committee of creditors will meet on May 7 to consider Lakshadweep Pvt Ltd’s bid for the embattled real estate developer Jaypee Infratech and they will e-vote on the proposal on May 8. However, sources indicated that the lenders might not approve the proposal as they “are not pleased with the subdued bid value.” According to the rules, a proposal needs to have the approval of at least 75% of the lenders.

As reported by FE earlier, Lakshadweep Pvt Ltd, a joint venture between Sudhir Valia-led Suraksha Asset Reconstruction Company and Mumbai-based Dosti Reality, has offered to bring in Rs 3,510 crore upfront for the 25,000 apartment residential project of the Jaypee Group along the Noida Expressway. In addition, Rs 4,000 crore due to the banks shall be collected from the sale of land parcels of the Jaypee Group.

As per the assessment by two independent valuers Mitcon Consultancy & Engineering Services and Agarwal Associates, the company’s liquidation value is around Rs 12,000-14,000 crore, much higher than Lakshadweep’s offer. Value of other assets of the company is also undervalued, another source said. On August 9 last year, the Allahabad bench of the National Company Law Tribunal had accepted lender IDBI Bank’s plea and admitted Jaypee Infratech as a case under insolvency resolution for defaulting Rs 526 crore.

The value of assets pledged by Jaypee Infratech with lenders is much higher than the company’s outstanding loans, as per the application filed by IDBI Bank before the NCLT. According to IDBI Bank’s application before NCLT, the market value of the pledged assets is estimated at Rs 17,116 crore. The distress value of the assets, on the other hand, is estimated to be Rs 14,548 crore. According to sources, total assets of the company, as per the assessments of the bank, were valued at Rs 33,000 crore. Jaypee Infratech has outstanding loans of about Rs 8,500 crore.

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