Jaypee Infratech’s creditors defer voting on Suraksha’s offer; may consider revised bid from NBCC

By: |
May 24, 2021 5:09 PM

Jaypee Infratech's financial creditors on Monday deferred the voting process on Suraksha group's offer to acquire the realty firm and will decide later this week whether bids of Suraksha group as well as NBCC should be considered again.

Sources said there was no unanimity among lenders on whether NBCC bid should be considered at this stage.

Jaypee Infratech’s financial creditors on Monday deferred the voting process on Suraksha group’s offer to acquire the realty firm and will decide later this week whether bids of Suraksha group as well as NBCC should be considered again. Days after NBCC strongly objected to the Committee of Creditors (CoC) rejecting its offer and also questioned the jurisdiction of Interim Resolution Professional (IRP) Anuj Jain, the creditors held a meeting to discuss NBCC’s addendum to its existing offer.

The CoC, at its meeting on Monday, decided to conduct voting on May 27-28 on whether offers from both contenders — Suraksha group and NBCC — should be allowed to submit their resolution plans for Jaypee Infratech Ltd (JIL), which went into insolvency proceedings in 2017. As per earlier schedule, the voting process on Suraksha group’s bid was to commence from noon on Monday (May 24) and end at 5 pm on May 27.

According to a regulatory filing, the CoC has deferred the voting process on Suraksha group’s bid. The CoC has also decided “to put to vote from May 27 to May 28 – item of allowing further time to both resolution applicants for submitting final resolution plan; and other items”, as per the filing submitted by IRP Anuj Jain to stock exchanges. However, no specific reason was given by Jain for deferment of voting process on Suraksha group’s offer.

Sources said there was no unanimity among lenders on whether NBCC bid should be considered at this stage. Therefore, it was decided to take views of the lenders and homebuyers through voting whether further extension should be given to both the parties, they added. On Sunday, Suraksha Group warned of legal action against lenders as well as the IRP if there are any delays and change in the voting process already approved on its

NBCC on Saturday questioned the jurisdiction of the IRP in submitting that the offer was non-compliant with the insolvency law and demanded that it should be put to vote. At its meeting on May 20, the CoC — which includes representatives of 13 banks and around 20,000 homebuyers — rejected NBCC offer and that voting process on Suraksha group’s final bid will start on Monday.

Objecting to its bid being declared as non-compliant with certain provisions of the insolvency law, NBCC, on Saturday, shot off a strongly-worded letter to Jain and also submitted a 14-page addendum to its final bid to clarify concerns raised on treatment of dissenting creditors.

Many lenders, including SBI and IDBI, had asked the IRP to call another meeting of the CoC to discuss NBCC’s offer and accordingly, a meeting was convened on Monday morning. Sources said that Jain has again submitted his report on the NBCC’s addendum to the CoC, wherein it has been mentioned that the company’s bid was still non-compliant despite clarifications.

Last week, sources said that NBCC offer was not considered for voting based on the IRP’s report stating that it was non-compliant with provisions of the Insolvency and Bankruptcy Code (IBC) and an order of the Supreme Court passed in the JIL matter related to the treatment of dissenting financial creditors. In his earlier report submitted to the CoC, Jain had said that NBCC proposal to offer NCDs to dissenting financial creditors for payment of liquidation value and also to include ‘guarantee security interest’ as well as ‘promoter security interest’ has been termed as non-compliant with the provisions of the code.

This is the fourth round of the bidding process in the matter of JIL bankruptcy case. JIL went into the insolvency process in August 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium. In the first round of insolvency proceeding, the Rs 7,350-crore bid of Lakshadweep, part of Suraksha Group, was rejected by lenders.

The CoC had rejected the bids of Suraksha Realty and NBCC in the second round held in May-June 2019. The matter reached the National Company Law Appellate Tribunal (NCLAT) and then the apex court. In November 2019, the Supreme Court directed the completion of JIL insolvency process within 90 days and ordered that the revised bids to be invited only from NBCC and Suraksha group.

In December 2019, the CoC, approved the resolution plan of NBCC with a 97.36 per cent vote in favour during the third round of the bidding process. Later in March 2020, NBCC had got an approval from the NCLT to acquire JIL.
Homebuyers’ claim amounting to Rs 13,364 crore and lenders’ claims worth Rs 9,783 crore were admitted last year.

However, the order was challenged before the NCLAT and later in the Supreme Court, which in March this year ordered that fresh bids should be invited only from NBCC and Suraksha. The apex court had also directed that resolution process be completed in 45 days, which lapsed on May 8 and an application has been filed to extend the timeline for finding a buyer for JIL.

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