Jaypee Infratech faces liquidation as resolution eludes realty company

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Jaypee Infra faces liquidation as resolution eludes realty company! 
NEW DELHI | MUMBAI: The threat of liquidation hangs over Jaypee Infratech  after the Interim Resolution Professional (IRP)  told the Supreme Court on Friday that the bankruptcy resolution process at the debt-laden realtor had failed to stitch together a revival plan before the clock ran out.

According to the Insolvency and bankruptcy code, 2016, a resolution plan must be finalised and approved within 270 days of a company’s admission to the National Company Law Tribunal: That deadline ended Saturday.

The development at the apex court follows the committee of creditors’ decision, earlier this week, to reject the highest offer from Lakshadweep, a joint venture between Suraksha Asset Reconstruction and Mumbai builder Dosti Realty. Jaypee Infratech is a prominent realtor with extensive presence in the Delhi suburbs of Noida and Greater Noida.

 To be sure, the IRP on his own cannot propose the liquidation of a company if a debt resolution plan fails to materialise within the stipulated 270 days. “…the resolution professional does not propose liquidation. He can only apprise NCLT of the facts. Under the law, a lot of things are being tested in this case. There are twin tracks running — the NCLT and the SC. The court was told of the latest facts today,” said a person close to the process.

 However, the bench comprising Chief Justice Dipak Misra, Justice AM Khanwilkar and Justice DY Chandrachud reiterated that the primary aim is to ensure flat buyers get relief. The Supreme Court will now hear the case in detail on May 16. Liquidation would mean the company’s assets will be sold, with lenders having the first right over the proceeds.

CO HAS DEBT OF Rs 9,800 CRORE
The company has an outstanding debt of about Rs 9,800 crore. Its lenders include IDBI, IIFCL, Axis Bank, Bank of Maharashtra, Corporation Bank, ICICI Bank, IFCI, J&K Bank, LIC, SBI, Syndicate Bank, Srei Equipment Finance and Union Bank.

Earlier this week, the lenders also did not consider a Rs 10,000-crore unsolicited offer by the promoters of the debt-laden company for debt repayment and completion of unfinished housing projects, as the existing provisions of the bankruptcy and insolvency law do not allow bids from defaulting owners.

About 32,000 home buyers were left in the lurch after the Allahabad bench of the NCLT on August 9 classified Jaypee Infratech as insolvent on the petition filed by IDBI Bank under Section 7 of Insolvency and Bankruptcy Code, 2016. Jaypee had defaulted on a Rs 526-crore loan by the bank.

Jain, the IRP appointed by NCLT, had asked the interested entities to submit their expressions of interest by November 7. However, earlier this week, the committee of creditors of Jaypee Infratech rejected the offer of the highest bidder Lakshadweep and didn’t consider the one submitted by the Jaypee promoter.

Meanwhile, Jaiprakash Associates (JAL) through its counsel Anupam Lal Das said it had a plan for Jaypee Infratech outside the IBC and that could be successful. jal is the parent company of Jaypee Infratech. During the hearing, Ajit Sinha, senior advocate appearing for the home buyers, brought to the notice of the apex court that the builder had still not complied with the September 2017 order of depositing Rs 2,000 crore.

So far, the company has deposited a total of Rs 750 crore with the registry of the Supreme Court. The company has around Rs 24,000 crore worth of assets, including land parcels, the Yamuna Expressway and a hospital.

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