Jaypee Infra insolvency: Suraksha’s final bid better than NBCC, RBSA report

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Published: December 10, 2019 4:37:22 AM

The bid evaluation advisory by the corporate valuation firm was conducted for JIL's interim resolution professional (IRP) Anuj Jain and committee of creditors (CoC).

Jaypee Infra insolvency, Suraksha Reality, committee of creditors, NBCC, Lakshdeep Investments and Finance, Standard Chartered BankIt assumes importance as the draft report is on the final bids by NBCC, the SPV of Suraksha Realty and Lakshdeep Investments and Finance.

An evaluation conducted by RBSA Advisors on the final resolution plans for acquiring the assets of Jaypee Infratech (JIL) revealed that the bid by Suraksha Reality-led SPV scored more points over that of government-run NBCC in terms of upfront cash infusion for homebuyers, bankers, delivery of housing units, among others.

The bid evaluation advisory by the corporate valuation firm was conducted for JIL’s interim resolution professional (IRP) Anuj Jain and committee of creditors (CoC). It was submitted to the CoC on Sunday (December 8). It assumes importance as the draft report is on the final bids by NBCC, the SPV of Suraksha Realty and Lakshdeep Investments and Finance.

JIL homebuyers and lenders will start voting on both the resolution plans from Tuesday, and the voting will continue till December 16. Around 13 banks and more than 23,000 homebuyers have the voting rights, of which homebuyers account for 59.26% share, while bankers have 40.71%. For approval of any resolution plan, at least 66% votes should be in favour.

In its previous draft evaluation report, submitted to CoC last month, RBSA gave more points to Suraksha’s bid on various parameters, including flat delivery and compensation to secured financial creditors.

RBSA analysed the bids based on an evaluation matrix provided by the CoC as it is in the ‘process document’. In its latest report, it divided the evaluation matrix into two parameters — quantitative and qualitative.

Under quantitative parameters, which include upfront cash payment to homebuyers and bankers, Suraksha led with a score 29.143 out of 100. On the other hand, NBCC got a score of mere six under ‘Scenario 1’ and 26.241 under ‘Scenario II’.

With respect to homebuyers, under Scenario I, the Rs 2,000-crore cash infusion is not treated as upfront cash infusion for completing flats as the same creates a future repayment obligation on secured financial creditors (SFCs), while, under Scenario II, this amount is treated as upfront cash infusion. Under qualitative parameters, NBCC got a score of 22.50 under Scenario I and 42.741 under Scenario II. Its competitor, on the other hand, got a higher score of 43.893.

However, under qualitative parameters like standing of the bidding and flagship company, including that of promoters and directors, and assessment of credibility as well as real estate experience and ability to turnaround distressed companies, NBCC had a better score than Suraksha’s.

Suraksha, in its final bid submitted on December 7, raised the upfront cash infusion to Rs 309 crore, while it raised land bank in the land-debt swap deal to 2,320 acre from 2,275 acre.  It offered land worth Rs 500 crore to be transferred toward delay compensation for homebuyers. It will deliver more than 20,000 flats in three years.

The company will raise a working capital infusion of Rs 2,000 crore to complete the flats for which it has presented a term sheet from Standard Chartered Bank. NBCC, in its final resolution plan, has offered to deliver the flats in 3.5 years from 4 years earlier.

It has offered to make an upfront cash infusion of Rs 120 crore. It has also raised the land under land-debt swap deal to 1,526 acre from 1,426 acre earlier. The company will raise Rs 2,000 crore via securitising the future toll collections from the expressway.

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