Homebuyers protest against Jaypee Associates
Photo: Avishek Dubey
SC orders Jaiprakash Associates to deposit Rs. 1000 crore by 15 June

Posted: May 16, 2018     By Avishek Dubey

The Supreme court on Wednesday stayed the liquidation process of Jaypee Infratech Limited (JIL) and asked its promoter group Jaiprakash Associates Ltd. (JAL)  to deposit an additional  Rs. 1,000 crore by June 15, 2018. The step has been undertaken for ensuring refund of money to the hassled homebuyers.

JIL has failed to deliver flats to nearly 18,000-19,000 buyers and is presently in huge debt.

The 270-day deadline to find a solution to the company's debt problems had lapsed on May 12. As per the Insolvency and Bankruptcy Code, a company has to be sent for liquidation if no solution is found to its debt issues by the deadline period.

JAL has so far deposited Rs. 750 crore with the apex court’s registry so far. Further, the firm has proposed to offer 2,000 equity shares of JIL to each home buyer as part of its Rs. 10,000 crore proposal to revive it.

The apex court said the interest of the home buyers will be fully protected even if that meant overriding the Insolvency and Bankruptcy Code which keeps the interest of secured lenders above all. As per the code, the buyers, being unsecured creditors, would have been left exposed as the secured creditors would have received the first right on the assets of the company

There were three bidders in the race to buy Jaypee Infratech— Lakshadweep, the Adani group and Kotak Realty Fund-Cube Highways.

In the end, only Lakshadweep, a joint venture of Sudhir Valia-led Suraksha Asset Reconstruction Company and Mumbai-based Dosti Realty, was left in the fray but its Rs 7,000-crore offer was rejected by a committee of creditors – over a dozen lenders of Jaypee — for being too low.

Jaypee Infratech owes Rs 9,094.31 crore to a consortium of over a dozen banks led by IDBI bank. The state-owned lender alone has a 44.3 percent share in Jaypee’s total debt.

According to a note prepared by IDBI Bank, the value of just the immovable assets mortgaged to the IDBI consortium is Rs 17,116 crore while their distress value is pegged at Rs 14,548 crore. Lakshadweep’s Rs 7,000 crore bid pegged Jaypee’s value at less than half of IDBI’s distress scenario number.

The Allahabad bench of the National Company Law Tribunal will hear the insolvency matter on May 22 while SC will hear the plea of the homebuyers on July 4.

TAGS: SC asks Jaypee Associates to deposit Rs. 1 / 000 crore / SC asks Jaypee to deposit Rs. 1 / 000 crore / SC stays liquidation of JIL / Jaypee Infratech Limited / Jaypee Associates / JIL Liquidation / Liquidation of JIL / Home buyers / Supreme Court / SC / IDBI