NBCC To Monetise Jaypee Assets To Complete Stuck Projects
State-owned NBCC now plans to monetise Jaypee's assets to begin work on the latter's incomplete projects. The company has also assured the homebuyers that it will deliver these projects in three years in case its bid to acquire the beleaguered developer is accepted.
NBCC, along with Kotak Investment, Singapore-based Cube Highways and Suraksha group, are the four shortlisted bidders that had submitted their plans to acquire Jaypee Infratech, which is undergoing insolvency proceedings in the National Company Law Tribunal (NCLT).
The ongoing saga
Earlier, the Supreme Court (SC) disposed of homebuyers' applications against initiating insolvency proceedings against Jaypee Infratech and asked the National Company Law Tribunal (NCLT) to go ahead with company liquidation. It was in August last year that IDBI Bank moved the NCLT against the developer for non-payment of Rs 526 crore loan, following which buyers moved court.
After Anuj Jain, on September 18, was removed from being the Insolvency Resolution Professional of the company at the CoC, financial creditors of Jaypee have now, have voted online on six issues, including the appointment of a new resolution professional (RP). These stakeholders have also voted for a lower fee for the RP, acceptance of the resignations of seven independent directors and approval of Form G for an invitation for expression of interest.
It is important to note here that before an amendment was made in the Insolvency and Bankruptcy Code, 2016, homebuyers were at the end of the spectrum of financial creditors in case the company’s assets were liquidated, forcing them to take legal recourse. Homebuyers, who have been waiting for possession of their homes for over a decade now, took to the streets and to the internet to oppose company liquidation. When Parliament approved changes in the bankruptcy code and brought homebuyers on a similar footing to that of financial institutions some clarity did come their way.
Now, they are allowed to be a part of the Committee of Creditors (CoC) along with banks and financial institutions when the company assets are liquidated. This will help them get a refund of the money they invested in Jaypee projects.
Meanwhile, JAL is also headed towards the same fate as its realty arm. Private lender ICICI Bank has initiated insolvency proceedings against JAL over non-payment of Rs 1,200 crore. The Allahabad Bench of the National Company Law Tribunal (NCLT) has given a notice to the company in this regard.