Mumbai-based Suraksha Group’s resolution plan to bail out debt-ridden JIL has got the approval of financial lenders and home buyers.
Jaypee Infratech Limited
After many years, the customers of Jaypee Infratech Ltd have finally got the hope of fulfilling their dream of home. Mumbai-based Suraksha Group’s resolution plan to bail out debt-ridden JIL has got the approval of financial lenders and home buyers. Public sector company NBCC and security conglomerate Jaypee Infratech were in the race for acquisition. There was a tough fight between the two over the acquisition of JIL. The 10-day voting process for the acquisition proposal of both the companies ended on Wednesday.
In this, where the security group got 98.66 percent votes, 98.54 percent votes were in favor of the resolution plan of the public sector NBCC. According to those who knew the voting process, most of the customers who booked houses with the status of banks/financial institutions and financial lenders voted in favor of both the proposals.
Insolvency resolution case going on since August 2017
The bidding for the acquisition of JIL, which was placed under the loan resolution process under the Insolvency and Bankruptcy Code (IBC), was repeatedly mired in completion and this was its fourth round. The insolvency resolution case of JIL is going on before the National Company Law Tribunal (NCLT) since August 2017.
JIL’s Interim Resolution Professional (IRP) Anuj Jain said, the security group has been successful in the bid with the support of 98.66 per cent votes. It got 0.12 percent more votes than NBCC. The IRP of JIL later informed the result of the votes through information sent to the stock exchanges.
According to the voting results, the security group got 41.91 percent of the total votes polled by 12 banks out of 43.25 percent. Whereas NBCC got 41.79 per cent votes from him. Financial institutions claim to have collected a total of Rs 9,783 crore dues on JIL. Barring ICICI Bank (1.34 per cent voting rights), all other banks voted in favor of the security group. ICICI Bank and Shrei Equipment Finance Ltd (0.12 per cent voting share) both voted against NBCC’s bid.
Both Suraksha Group and NBCC got 56.62 per cent of the total votes for home buyers and 0.13 per cent for fixed deposit holders.
Relief to more than 20 thousand home buyers
However, the successful resolution of JIL’s problem will bring relief to over 20,000 home buyers of the company. JIL has several housing projects in Noida and Greater Noida in Uttar Pradesh which are stuck. 12 banks and more than 20 thousand home buyers have voting rights in IL’s Committee of Creditors (CoC).
In the committee, those buyers who have booked houses by paying money have 56.63 percent voting rights and 43.25 percent for the lenders. Fixed deposit holders have got 0.13 percent voting rights. Once the security group’s offer is cleared by the CoC, the proposal will have to be approved by the National Company Law Tribunal (NCLT).
Security group made this offer
In its latest proposal, the Suraksha group has offered to give 2,500 acres of land to banks along with a proposal to provide Rs 1,300 crore through non-convertible debentures. The company has promised to complete the construction work of the pending houses in the next 42 months.
The CoC of JIL on 10th June appointed Lakshadweep Investments & Finance Pvt. Ltd. (Suraksha Group) along with Suraksha Realty Limited and NBCC (India) Limited decided to vote on the bid. The process of e-voting started on June 14.
Construction of pending houses will be completed in next 42 months
Meanwhile, the spokesperson of the security group has thanked the IRP and CoC for the entire process being carried out properly. “We are committed to the home buyers and assure them that the construction work will be done expeditiously in all the phases as per our resolution plan so that the promised housing can be delivered,” the spokesperson said.
What’s the matter?
JIL came under insolvency process in August 2017. The bank group led by IDBI Bank had applied in NCLT. In the first round of insolvency proceedings, the Rs 7,350 crore bid of Suraksha Group company Lakshadweep was rejected by the lenders. After this, in the second round held in May-June 2019, the bids of Suraksha Realty and NBCC were also rejected by the CoC.
The matter first reached the NCLT and then the Supreme Court. In November 2019, the Supreme Court directed that bids be invited only from NBCC and Suraksha Group for the acquisition of JIL. The committee of lenders then approved the resolution plan of NBCC in the third round of bidding in December 2019 with 97.36 per cent votes.
In March 2020, NBCC also got approval from NCLT to acquire JIL. But the order of the NCLT was challenged in the NCLAT, the matter later once again reached the Supreme Court. The Supreme Court on March 24 this year ordered to invite fresh bids only from NBCC and Security.
Earlier, between May 20 and May 24, there were rounds of accusations regarding the bids. It was finally decided through the voting process held on 27-28 May that additional time should be given to NBCC and the Security Group to submit the revised and final bids. After this, on June 10, the CoC decided to put the bids of NBCC and the security group together for voting. The decision of this voting has come out today.
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