NBCC says its bid to buy Jaypee Infratech compliant, backed by govt

Industry Outlook Team | Monday, 14 June 2021

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State-owned NBCC, which is in the race to buy Jaypee Infratech Ltd NSE 4.55 % (JIL), on Sunday assured stuck homebuyers that its bid is concrete, fully backed by the government and the PSU would complete over 20,000 pending flats on time as per the schedule. A day before the beginning of the voting process, the two contenders NBCC NSE 5.48 % and Suraksha held separate webinars on Sunday with hundreds of homebuyers to enlighten their resolution plans and address doubts of flat owners.

In the webinar, NBCC expressed confidence that it would get approval from Yamuna Expressway Industrial Development Authority (YEIDA) to hive off Yamuna Expressway to a Special Purpose Vehicle (SPV) and the transfer of 90 per cent stake to bankers.

NBCC CMD, P K Gupta said, the firm has enhanced its plan compared with its 2019 bid, by making provisions of 100 acre land for delayed penalty.

"Our plan is very concrete and everything is very clear. We cannot hide anything. We have tried to improve the plan from the last time," Gupta said. "We get support from the government and we are responsible to the government," he proclaimed.

The NBCC CMD said that tower-wise delivery schedules have been offered in the bid.

Asserting that NBCC has a major presence in the Delhi-NCR market, Gupta stated, "In no time we can mobilise technical and financial resources to start the projects."

He added there is no additional burden on the homebuyers in its resolution plans. "If we are not able to sell the land, we will still be able to complete their projects."

NBCC's Senior Executive Director (Project) Yogesh Sharma spoke the NBCC has put a bid to acquire JIL, with "full backing of the government." He said the 70 per cent of the pending flats would be finished over the next two and a half years.

Sharma articulated confidence that bankers would encourage its bid as they did in 2019. He said the firm is offering Rs 8,700 crore to banks as against

the claim of Rs 9,782 crore. "Jaypee infra will become a subsidiary. There is no question that NBCC will not come in with resources," he stated while responding a query whether NBCC would infuse funds in case of shortfall.

On concerns raised by homebuyers that NBCC bid is non-compliant due to lack of approval of YEIDA for transfer of Expressway to bankers, Sharma asserted, "We are 2000 per cent confirmed that YEIDA will give the permission."

"I don't know why everyone is worried," he told, adding that the firm would seek approval of YEIDA after it wins in the bidding process.

NBCC's Chief General Manager (Finance) V K Choudhary also addressed various concerns of the homebuyers and advised them to vote for its bid.

On the other hand, Suraksha has offered to bankers over 2,500-acre land and nearly Rs 1,300 crore by release of non-convertible debentures.

Previous week, the Committee of Creditors (CoC) decided to put bids of both NBCC and Suraksha group to vote for acquiring JIL through Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The CoC comprises members of 13 banks and a representative of over 20,000 homebuyers. Flat owners take over 56 per cent voting share in the CoC. The voting process would begin from Monday and continue till June 23.

This is the fourth round of the bidding procedure in the matter of the JIL bankruptcy case. JIL went into the insolvency process in August 2017 after the National Company Law Tribunal (NCLT) acknowledged an application by an IDBI Bank-led consortium.

In the initial round of insolvency proceeding, the Rs 7,350-crore bid of Lakshadweep, part of Suraksha Group, was rejected by lenders. The CoC had disallowed the bids of Suraksha Realty and NBCC in the second round held in May-June 2019.

The matter went the National Company Law Appellate Tribunal (NCLAT) and then the apex court.

In November 2019, the Supreme Court focused the completion of JIL insolvency process within 90 days and ordered that the revised bids be invited only from NBCC and Suraksha.

Then, in December 2019, the CoC permitted the resolution plan of NBCC with a 97.36 per cent vote in favour during the third round of the bidding process.

In March 2020, NBCC had got support from the NCLT to acquire JIL. Though, the order was challenged before the NCLAT and later in the Supreme Court, In November 2019, the Supreme Court directed the completion of JIL insolvency process within 90 days and ordered that the revised proposals be invited only from NBCC and Suraksha.

The apex court had also focused that the resolution process be completed in 45 days, which lapsed on May 8 and an application has been filed to postpone the timeline for finding a purchaser for JIL.