NBCC to acquire Jaypee Infratech. What's the way forward?
Noida: The resolution process in debt-ridden Jaypee Infratech ended with the Committee of Creditors (CoC), under the Interim Resolution Professional (IRP) Anuj Jain announced the result of e-voting of lenders and homebuyers on Tuesday.
A week-long (24x7) e-voting process, which had begun at 9 am on December 10, concluded late night on December 16.
State-owned National Buildings Construction Corporation (NBCC), for which, the homebuyers were vocal in support and even ran a campaign to appeal homebuyers to garner support, gained support almost from all categories of creditors in Jaypee Infratech with 97.36 per cent votes against Suraksha Realty.
Following the outcome of e-voting, the CoC apprised the management of NBCC that their resolution plan to acquire and the blueprint submitted to complete stalled Jaypee Infratech housing projects was approved.
“Reference to the Corporate Insolvency Resolution Process of Jaypee Infratech Ltd (JIL), it was informed by IRP that NBCC’s plan was approved by the committee of creditors by majority of vote sharing – 97.36 % on December 17,” a letter issued to NBCC read.
What is next process:
The insolvency proceedings which was initiated under Insolvency and Bankruptcy Code (IBC) on the direction of National Company Law Tribunal (NCLT) on a plea of IDBI bank consortium against Jaypee Infratech will come to an end with the final consent of NCLT. Persons associated with the matter and aware with the development said the CoC will held a meeting in next one or two days and then the out come will be presented before the NCLT.
Following the submission of resolution plan to the NCLT, a formal takeover process will be directed by the tribunal. Sources said with taking over the projects, NBCC would request NCLT to transfer the secured amount of Rs 800 crore which the Supreme Court had transferred to NCLT.
“SC had collected Rs 750 crore from Jaiprakash Associate Ltd (Jal - father company of Jaypee Infratech). The amount has grown to around Rs 800 crore with interest. NBCC would request NLCT to transfer this amount for initial construction,” a source said in condition of anonymity.
He added, “Apart from IRP (Anuj Jain) and other CoC members, the ministry of urban affairs and ministry of finance have played a vital role in ensuring the resolution on this much debated issue. Jaypee Infratech was a testing case under IBC Act and also a challenge for the government. The government was intended to resolve the matter and therefore, some changes were also introduced in IBC Act. The outcome of Jaypee Infratech insolvency case has set an example and would pave the way for other real estate projects going under insolvency proceedings.”
What homebuyers said:
The approval of NBCC’s bid has no doubt brought a sigh of relief to over 20,000 beleaguered homebuyers who had invested their money in the projects and have been waiting for their flats nearly for a decade.
“With this outcome, almost all hurdles have been resolved. We waited for nearly 10 years being uncertain whether we will get our flats or not. It has revived hope of most of the homebuyers who had almost lost their hope and stopped paying their dues,” said a homebuyer, who is also one of the petitioner in the case.
As a matter of fact, the homebuyers were vocal in favour of NBCC. With vote share of 57.66 per cent in CoC, they supported state-run real estate firm (NBCC) with overwhelming majority of 97.36 per cent.
“What went in favour of the homebuyers is that now they will not have to request the SC and the tribunal to supervise further process because the NBCC will takeover and it will be responsible for completion of projects in time bound matter. NBCC would generate funds required for construction as it had stated in its final resolution plan,” said another homebuyer, requesting not to be named.
On the direction of the Supreme Court, the CoC on December 7, had put the resolution plans of two bidders – NBCC and Mumbai-based Suraksha Realty for vote on December 10 which ended on December 16.
On November 6, the Supreme Court directed completion of Jaypee Infratech's insolvency process within 90 days and said the revised resolution plan will be invited only from NBCC and Suraksha Realty.
In its bid, NBCC had proposed to complete over 20,000 pending flats in the next three-and-a-half years.