Unhappy with the “low bids” received in the insolvency resolution process, the creditors of beleaguered real estate developer Jaypee Infratech want the top bidder to raise the value of bids, sources said. “The negotiations with the banks are on and it’s been going on over the past few days. The top bidder has been asked to increase the bid value by the committee of creditors (CoC) and at least match the bid with the liquidation value… The bids are yet to be finalised,” a source said. The liquidation value of the company is around Rs 7,700 crore while the total outstanding of the banks is around Rs 9,000 crore. ICICI Bank, IDBI and SBI are the three largest lenders to Jaiprakash Associates.
The top bidder, Lakshadweep Group, has submitted a bid of over Rs 7,000 crore. Its offer involves setting aside Rs 3,000-3,500 crore towards construction of flats and making an upfront payment of around Rs 2,000 crore to lenders. Lakshadweep is a joint venture between Sudhir Valia-led Suraksha Asset Reconstruction and Mumbai-based Dosti Reality. Also, Suraksha is said to be offering to swap land for loans of around Rs 5,000 crore. Calls to the company remained unanswered.
Another lender India Infrastructure Finance had also written to resolution professional Anuj Jain that they are not satisfied with the bids and want it to be higher.
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 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 NCLT.
According to IDBI Bank’s application, the market value of the pledged assets is estimated at Rs 17,116 crore. The distress value, on the other hand, is estimated to be Rs 14,548 crore. According to sources, total assets as per the assessments of the bank, were valued at Rs 33,000 crore.
The embattled real estate firm has until now deposited Rs 650 crore out of the Rs 2,000 crore. The company has been directed to deposit another Rs 100 crore by May 10.