NCLAT annuls voting on NBCC bid to acquire Jaypee Infra

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Published: May 18, 2019 1:03:46 AM

The National Company Law Appellate Tribunal (NCLAT) on Friday annulled voting by homebuyers and lenders on NBCC’s bid to acquire bankrupt Jaypee Infratech (JIL), and allowed renegotiation on the offer by May 30.

Allows CoC to renegotiate on state-run PSU’s offer by May 30; fresh voting from May 31Allows CoC to renegotiate on state-run PSU’s offer by May 30; fresh voting from May 31

The National Company Law Appellate Tribunal (NCLAT) on Friday annulled voting by homebuyers and lenders on NBCC’s bid to acquire bankrupt Jaypee Infratech (JIL), and allowed renegotiation on the offer by May 30.

Hearing a plea by IDBI Bank, seeking a stay or annulment of the voting process, a three-member NCLAT bench headed by chairman justice SJ Mukhopadhaya also allowed nine homebuyers’ associations representing around 5,000 buyers to file intervention application.

The appellate tribunal also allowed the committee of creditors (CoC) to renegotiate on NBCC’s bid by May 30.

Fresh voting process will start from May 31, the bench said.

On Thursday, voting started to approve or reject NBCC’s bid to acquire JIL. As many as 13 banks and over 23,000 homebuyers of JIL have voting rights in the CoC.
The voting process was to end on Sunday and the result was to be announced on May 20.

In its order on Friday, the bench said, “in the meantime, the voting already taken is annulled”.

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IDBI Bank, the biggest lender to the firm, had opposed NBCC’s bid, saying it was conditional. It said NBCC’s offer for the company was conditional upon grant of approval to transfer Yamuna Expressway’s business.

The bench further said, “The CoC, if required, may renegotiate with NBCC by May 30, 2019, and will start fresh voting from May 31, 2019 and onwards.”

The appellate tribunal left it to the CoC to approve the resolution plan of NBCC “if it is in accordance with law”.

However, the bench said, “In case the CoC is not inclined to accept the plan, they will not pass any order of rejection without prior permission of this appellate tribunal as the matter relating to their voting share and other financial creditors is pending consideration.”

While allowing intervention application of homebuyers, the bench said their representative can take legal assistance considering the fact that the allottees have no expertise in the legal field.

Earlier this month, creditors, including banks and homebuyers, rejected a bid by Mumbai-based Suraksha Realty through a voting process, following which the CoC decided to consider NBCC’s offer.

In its revised offer, NBCC proposed an infusion of `200-crore equity capital, transfer of 950 acres worth `5,000 crore as well as Yamuna Expressway to banks and completion of flats construction by July 2023 in order to settle an outstanding claim of `23,723 crore of financial creditors.

Earlier this week, the CoC decided to put on vote the revised offer of NBCC, with homebuyers favouring the voting process while bankers dissenting.

Lenders had written to NBCC seeking clarifications on certain relief and concessions put forward by the public sector firm in its resolution plan. However, NBCC decided not to dilute the conditions of exemption from income tax liability as well as from taking consent of development authorities for transfer of businesses.

Clarifications from the NBCC were sought in the wake of the IRP flagging to the lenders that NBCC’s bid was conditional and non-binding.

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