Suraksha Group finally takes over Jaypee Infratech; constitutes 3-member board giving relief to more than 20,000 buyers

Mumbai-based Suraksha Group has finally taken over the embattled real estate firm Jaypee Infratech by constituting a three-member board giving relief to more than 20,000 homebuyers whose investments are stuck across various projects being developed in Delhi-NCR.

Mumbai-based Suraksha Group has finally taken over the embattled real estate firm Jaypee Infratech by constituting a three-member board giving relief to more than 20,000 homebuyers (Prashanth Vishwanathan/Bloomberg)

The takeover follows insolvency appellate tribunal NCLAT’s decision on May 24, upholding Suraksha Realty’s bid to acquire Jaypee Infratech while directing it to pay an additional 1,334 crore as farmers’ compensation.

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Also Read: Jaypee case: Takeover issues resolved, work on stuck projects set to resume soon

Upholding the National Company Law Tribunal’s (NCLT) decision of March 2023, the NCLAT on May 24 had said the decision was made to avoid any further delay in the implementation of the resolution plan and also to take care of the interests of all stakeholders, including home buyers and claim of Yamuna Express development authority YEIDA for additional compensation of the farmers.

Homebuyers’ take

Homebuyers told HT Digital that the rejection of YEIDA’s appeal removes one of the last hurdles in the implementation of the resolution plan of Jaypee Infratech. 

“This litigation had the potential of derailing the hopes of more than 20,000 homebuyers. Now the ball is in Suraksha’s court to hold up its end of the bargain and hand over the flats to the homebuyers,” said Abhirup Dasgupta, Partner, HSA Advocates. He heads the insolvency division of the firm.

May 24, 2024 to be considered as the approval date

In a regulatory filing on June 5 by Jaypee Infratech, Suraksha Group informed the IMC (Implementation and Monitoring Committee) that May 24, 2024, i.e., the date of the NCLAT order should be treated as the ‘Approval Date’ as defined in the approved resolution plan.

Also Read: Jaypee Infratech insolvency case: Monitoring panel seeks NCLT’s direction to implement Suraksha Group’s resolution plan

“Approval Date” shall mean date on which the order of the Adjudicating Authority under Section 31 (1) of the Code has been passed, or the order of the National Company Law Appellate Tribunal or the Supreme Court, if an appeal is made to such tribunal or court against the order of the Adjudicating Authority, having achieved finality. 

“B. That Phase II Period i.e. from the NCLT Approval Date till Approval Date, stands concluded in terms of the NCLAT order dated May 24, 2024 and accordingly, the Phase III period shall commence from May 24, 2024 onwards and the SRA shall take necessary steps in terms of the Implementation of the Resolution Plan, in terms of the decision taken by SRA in IMC meeting held on June 04, 2024,” the company said in a regulatory filing.

The IMC in its meeting held on June 4,2024, had approved the appointment of Sudhir V Valia as a non-executive director. It also approved the appointment of Aalok Champak Dave as executive director and Usha Anil Kadam as independent director.

The final resolution plan 

NCLT had on March 7, 2023, approved the bid of Suraksha group to buy Jaypee Infratech Ltd (JIL).

As per the final resolution plan submitted by Suraksha Group to Committee of Creditors (CoC) in May-June 2021, the infusion of 125 crore as equity and 125 crore debt needs to be done in Jaypee Infratech within 90 days of the approval date. 

Also Read: NCLT initiates insolvency against Jaiprakash Associates, admits ICICI Bank plea

As per the plan, Suraksha Group will arrange loan/credit facility of 3,000 crore within 90 days of the approval date, to be utilised as and when required, on need basis for completion of the projects. To institutional financial creditors, Suraksha Group will issue zero coupon Non-Convertible Debentures (NCDS) worth 1,280 crore and also provide around 2,550 acre land worth 6,457 crore (fair market value). JIL’s lenders had submitted a claim of 9,783 crore. It had also proposed to complete all incomplete flats over the next four years. 

The back story

In the fourth round of the bidding process to find a buyer for Jaypee Infratech in 2021, the Suraksha group had won the bid with 98.66% votes. As many as 12 banks and more than 20,000 home buyers had voting rights in the Committee of Creditors (CoC).

National Company Law Tribunal (NCLT) on March 7 approved a bid by Suraksha Realty and Lakshdeep Investments and Finance to buy Jaypee Infratech Ltd (JIL). 

The development came six years after Jaypee Infratech entered into insolvency proceedings.  In the first round of insolvency proceedings in 2018, the 7,350 crore bid of Lakshadweep, part of the Suraksha group, was rejected by the lenders. The CoC had rejected the bids of Suraksha and NBCC in the second round held in May-June 2019.

In November 2019, the Supreme Court had directed that the revised bids be invited only from NBCC and Suraksha. In December 2019, the CoC approved the resolution plan of NBCC during the third round of the bidding process. 

In March 2020, NBCC received approval from the NCLT to acquire JIL. However, the order was challenged before the NCLAT and later in the Supreme Court. In August, the top court transferred all pending cases relating to JIL from NCLAT to itself.

On March 21, 2021, the apex court ordered a fresh round of bidding between NBCC and Suraksha group within 45 days. Both companies submitted bids in April. In May, the CoC declared the NBCC bid as non-compliant and Suraksha’s bid was put to vote. In June 2021, Suraksha won the bid to take over JIL and complete the projects

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