Jaypee Infratech: Voting on bids gets underway

After evaluating resolution plans of two bidders to acquire debt-ridden Jaypee Infratech projects, the Committee of Creditors (CoC) initiated the voting process on Tuesday inviting lenders to pass their one preferred resolution plan between two. The CoC has put both bidders – government-run National Building Construction Corporation (NBCC) and Mumbai based private firm Suraksha Realty – simultaneously for voting option.

The voting process, which started Tuesday (December 10), will end on December 16. Around 13 banks and more than 23,000 homebuyers have the voting rights, of which homebuyers account for 59.26% share, while bankers have 40.71%. For the approval of any resolution plan, at least 66% votes should be in favour. Homebuyers' claim amounting over Rs 13,000 crore has been admitted, while banks' claim is worth Rs 9,800 crore.

This is the third round of the bidding process, which has been initiated on the direction of the Supreme Court. Following the apex court's direction, appointed Resolution Professional (RP) Ajun Jain had invited bids to acquire insolvent Jaypee Infratech housing projects. Both the bidders (NBCC and Suraksha) submitted their resolution plans consecutive third time, leaving no stone unturned to lobby the bankers and the homebuyers for support to pass their respective proposals.

In its latest bid, Suraksha Realty further improved its bid by offering more land and upfront cash to lenders. It has increased upfront payment to lenders to Rs 190 crore from Rs 175 crore offered in its revised offer submitted on December 3. While, NBCC has offered 1,526 acres of land to lenders in its revised bid.

According to sources, on Yamuna Expressway, the NBCC had proposed to transfer the road asset to lenders but before that, it would take a loan of around Rs 2,500 crore against toll revenue to fund construction spend. The Suraksha will keep expressway in its hand.

While proposals of both bidders were evaluated. The evaluation matrix is given on the basis of 'upfront cash' was a point of discussion, especially among homebuyers. The NBCC did not show 'upfront cash' to start the construction whereas the Suraksha Realty had shown Rs 125 crore 'upfront cash' and, therefore, the latter was given more numbers in the bid evaluation.

To avoid any further ambiguity in the process of the much-needed resolution, the CoC had initiated a pre-voting session, which, however, was stopped midway.

Jaypee Infratech, a subsidiary of crisis-hit Jaiprakash Associates, went into insolvency process in August 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium.