Jaypee Infratech: NBCC, Suraksha plans offer little for operational creditors

By: and |
Published: April 26, 2019 5:56:37 AM

The revised resolution plan by the consortium led by Suraksha Realty, too, has proposed a similar deal.

JIL’s committee of creditors (CoC) is scheduled to meet on Friday to evaluate the two bids.

State-owned NBCC, in its revised bid for assets of debt-laden Jaypee Infratech (JIL), has proposed to pay off the secured financial creditors’ (FCs) Rs 9,783-crore admitted claim in full. However, it has committed to pay only Rs 20 crore or a little over 4% of the operational creditors’ (OCs) Rs 464.20-crore admitted claim, which originally was a whopping Rs 9,712 crore.

The revised resolution plan by the consortium led by Suraksha Realty, too, has proposed a similar deal. It has offered to pay Rs 5,018.55 crore to secured FCs, while proposing to pay a naught to the OCs. Both the resolution applicants’ latest bids seem skewed towards secured FCs, documents submitted with resolution professional (RP) Anuj Jain showed.

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JIL’s committee of creditors (CoC) is scheduled to meet on Friday to evaluate the two bids. Legal sources say the JIL issue has some similarity with the Essar Steel case, where lenders have been asked to balance out the receivables by the National Company Law Appellate Tribunal (NCLAT). Its CoC has kept 92% of ArcelorMittal’s payment for themselves, while proposing to pay less than 5% to the OCs.

JIL’s total admitted financial debt comes to Rs 23,723 crore. Apart from admitted dues of secured FCs, homebuyers’ claim stands at Rs 13,389 crore. Fixed-deposit (FD) holders’ admitted claim stands at Rs 23 crore while refund seekers’ admitted debt is Rs 79 crore.

NBCC would pay the secured FCs admitted claim by way of an upfront payment of Rs 1,500 crore and transferring land worth Rs 5,000 crore (Rs 3,000 crore proposed in its initial resolution plan). The remaining Rs 3,283 is proposed to be paid by transferring 100% shareholding of the Expressway SPV.

Homebuyers would get only their completed housing units at no extra cost, but not any money in lieu of their Rs  13,389-crore admitted claims. NBCC proposed to make a conditional payment to the homebuyers towards penalty due to delay in possession at the rate of 25% of the amount due till the date insolvency proceedings against Jaypee Infratech. This will be given only if the Rs 750 crore deposited by JIL’s parent Jaiprakash associates (JAL) with the registry of Supreme Court for the refund to buyers comes to the company. This amount is lying with the NCLT.

In case of delay following the end of the moratorium period of 1 year from the scheduled delivery dates, NBCC will pay a delay penalty of Rs 5 per sq ft per month. For the FD holders, the government-owned infrastructure firm has proposed to make an upfront payment of their entire admitted claim of Rs 23 crore. Of the admitted claim of Rs 79 crore of the refund seekers, NBCC has offered to pay Rs 62.40 crore upfront.

Among the set of OCs, claimants are income tax department (Rs 3,334 crore), Yamuna Expressway Industrial Development Authority (YEIDA) towards additional compensation for landowners and others (Rs 6,112 crore) and other operational creditors (Rs 267 crore).

Suraksh will pay just Rs 18.55 crore upfront to the secured FCs and Rs 5,000 crore through a debt land swap deal. Its offer also includes Rs 10.26 crore upfront payment to FD holders and nil to the operational creditors. It will use the Rs 750 crore deposited by JIL’s parent Jaiprakash associates (JAL) to complete the housing projects.

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