Mumbai-based Suraksha Group on Wednesday received the approval of the committee of creditors (CoC) to take over bankrupt real estate firm Jaypee Infratech (JIL), with more than 98% of votes in favour of its resolution plan. The other contender, state-owned NBCC, lost the race by 0.12% votes.
This was the fourth round of bidding process to find a buyer for JIL, which went into Corporate Insolvency Resolution Process (CIRP) in August 2017.
Now, Suraksha’s resolution plan needs to be approved by the National Company Law Tribunal (NCLT).
A successful resolution of JIL will provide relief to over 20,000 homebuyers across various housing projects launched by the firm in Noida and Greater Noida.
“Suraksha Group has won the bid with 98.66% votes. It got 0.12% more votes than NBCC,” JIL’s interim resolution professional Anuj Jain said after the 10-day voting on the revised resolution plans of the Suraksha and NBCC concluded on Wednesday.
As many as 12 banks and more than 20,000 homebuyers have voting rights in the CoC. Homebuyers and creditors have 56.63% and 43.25% voting rights, respectively. Fixed deposit holders have 0.13% voting rights. At least 66% votes are required for the approval of a bid.
According to the voting result, Suraksha group got 41.91% votes from 12 banks out of their total voting right of 43.25%, while NBCC got 41.79% from institutional financial creditors, which have submitted claims of Rs 9,783 crore. All the banks, barring ICICI Bank which has 1.34% votes, voted in favour of Suraksha. Two lenders voted against NBCC’s bid — ICICI Bank and Srei Equipment Finance (0.12% voting share). Both Suraksha and NBCC got the full 56.62% and 0.13% votes of homebuyers and FD holders, respectively.
Welcoming the development, Suraksha thanked all the stakeholders, including the government, for their relentless efforts towards reviving the world-class residential project. “We are committed to homebuyers and assure them with accelerated construction work in all phases leading to faster deliveries as promised in our resolution plan,” the company said.
Suraksha Group has offered bankers more than 2,500 acres of land and nearly Rs 1,300 crore by way of non-convertible debentures. It has proposed to complete the pending apartments in 42 months.
The total claims of JIL are a little over Rs 22,600 crore with homebuyers’ share at around Rs 12,700 crore and that of 13 banks and financial institutions at Rs 9,783 crore.
In the first round of insolvency proceedings, 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 Supreme Court. In November 2019, the apex 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% vote in its favour during the third round of the bidding process. Later in March 2020, NBCC had got an approval from the NCLT to acquire JIL. However, the order was challenged before the NCLAT and later in the SC, which in March this year ordered that fresh bids be invited only from NBCC and Suraksha.
The SC had then directed that the resolution process be completed in 45 days, which lapsed on May 8, and an application was filed to extend the timeline. The JIL’s IRP has sought time till July 7 from the SC to complete the process.