Lenders to vote on NBCC offer for insolvent Jaypee Infratech from Friday

Lenders will vote on the offer made by NBCC for insolvent Jaypee Infratech from Saturday onwards, till June 10.

A late and unsolicited bid by the Adani group was kept in abeyance by the Committee of Creditors (CoC), which met on Thursday. Apart from the banks, the CoC also consists of home owners, who would have an important say in the voting.  The CoC requires 66 per cent of the votes to clear NBCC’s proposal.

NBCC has promised to complete by July 2023 all the apartments Jaypee was to develop. It has support of the home owners, said a source.

NBCC's proposal includes a Rs 200-crore equity infusion and transfer of 950 acres worth Rs 5,000 crore to the banks. It has said it will withdraw its offer for the company if government authorities reject approval for the transfer of Jaypee’s land and the Yamuna Expressway. The lenders were not optimistic about NBCC’s other condition of income tax waiver for the next 30 years on the land transfer.

Jaypee Infratech had defaulted on loans worth Rs 8,000 crore, taken from 13 banks (led by IDBI). This case was on the Reserve Bank's first list of 12 major defaulters, which it had instructed be sent for insolvency resolution. The financial claims made by the banks were far higher, at Rs 23,723 crore.

Apart from Rs 500 crore as upfront payment, the Adani group has additionally offered 1,000 acres to the lenders and Rs 1,700 crore to construct houses for those who had booked a home. Of the Rs 500 crore, the lenders are to get Rs 23 crore, with the rest of the money for the employees and operational creditors.  

Adani has included the Rs 750 crore deposit made by the Jaypee group with the Supreme Court for payment to the home owners. The SC order says the National Company Law Tribunal (NCLT, which administers the insolvency law) will decide on the deposit made by Jaypee. 

Apart from Jaypee Infratech, its erstwhile promoter, Jaiprakash Associates, had defaulted on loans from around 30 banks, with dues of around Rs 30,000 crore. Jaiprakash Associates had also defaulted on fixed deposits, foreign currency convertible bonds and payments to the Noida Authority, according to a Supreme Court order last August.