Jaypee Infratech insolvency: Creditors decide to vote on NBCC bid to acquire debt-laden realty firm from Friday

New Delhi: Creditors of Jaypee Infratech Thursday decided to put on vote NBCC’s bid to acquire the debt-laden realty firm even as the state-owned firm did not dilute certain conditions in its offer including relief from future tax liabilities, sources said. The voting under the insolvency process, run by Jaypee Infratech’s Interim Resolution Professional (IRP) Anuj Jain, will start from Friday and continue till 10 June, they added. As many as 13 banks and over 23,000 home buyers have voting rights in the committee of creditors (CoC). Buyers have nearly 60 percent votes. For the bid to be approved, 66 percent voters should be in favour of the deal. NBCC did not dilute its conditions related to exemption from future tax liabilities and seeking permission from Yamuna Expressway Industrial Development Authority (YEIDA), sources said. [caption id=“attachment_4294419” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] However, the public sector firm proposed that it would reduce the value of unsold inventories offered to lenders to Rs 1,300 crore from earlier Rs 1,750 crore, they added. Sources said the banks had reservations to NBCC’s bid, but the CoC still decided to put the offer on vote as per the direction of the National Company Law Appellate Tribunal (NCLAT). The tribunal had asked lenders to negotiate with NBCC by 30 May so that voting could start from 31 May. Earlier this week, lenders asked NBCC to sweeten its bid and demanded that the public sector firm should offer 1,426 acre land instead of 950 acre besides taking onus of getting approvals from income tax and development authorities. The IDBI-led lenders’ consortium had written to the NBCC that its bid would be considered “favourably” if the public sector firm meets its five conditions. “The resolution plan should reinstate 1,426 acres of land that was earlier offered to the secured financial creditors under the debt asset swap,” law firm Cyril Amarchand Mangaldas has written on behalf of the lenders consortium comprising 13 banks. NBCC should undertake to get the requisite approval from YEIDA if the “deemed approval” from YEIDA as proposed in the bid for transfer of Yamuna Expressway and land to special purpose vehicles (SPVs) are not approved by the adjudicating authority, the letter had said. Lenders also put a condition that NBCC should also undertake to get a necessary nod from the Income-Tax authorities for implementation of the bid if the relief sought by the public sector firm for any future tax liability is not approved by the adjudicating authority. “Any income tax liability or GST liability or corporate tax liability which arises in future on account of transfer of land parcels, the same shall be borne by the resolution applicant and not by the secured financial creditors,” the letter said. Earlier this month, the CoC rejected a bid by Mumbai-based Suraksha Realty through a voting process. Later, the panel decided to put on vote NBCC’s offer even as bankers were opposed to this move citing certain conditions in the resolution plan submitted by the public sector firm. On the bankers’ plea, the NCLAT had on 17 May annulled voting by homebuyers and lenders on NBCC’s bid and allowed renegotiation on the offer by 30 May. The voting process could start from 31 May. In its latest offer, NBCC had proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors, including banks and home buyers. On this bid, lenders had reservations on certain relief and concessions sought by NBCC and sought clarifications from the firm. Clarifications from the NBCC were sought in the wake of Jain flagging to the lenders that the state-owned firm’s bid was conditional and non-binding because of conditions like extinguishing of tax liability and exemption from seeking YEIDA consent for any business transfer. In 2017, Jaypee Infratech went into insolvency process after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium seeking revival of the realty firm. In the first round of insolvency proceedings conducted last year, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. Later in October 2018, the IRP started the second round of bidding process to revive Jaypee Infratech on the NCLT’s direction.