India (June 11, 2024), a Mumbai-based real estate conglomerate — The Suraksha Group has taken control of debt-laden Jaypee Infratech Ltd. through an insolvency resolution process and will pay the first installment of approximately Rs 133 crore to the Yamuna Expressway Industrial Development Authority (YEIDA) within three months. as reported by Business Standard
The National Company Law Appellate Tribunal (NCLAT) upheld the Suraksha Group’s bid to acquire Jaypee Infratech on May 24, requiring it to pay YEIDA Rs 1,334 crore as additional compensation to farmers. This decision supports the National Company Law Tribunal’s (NCLT) ruling from March 2023 and aims to prevent further delays in implementing the resolution plan, ensuring the interests of all stakeholders, including homebuyers and YEIDA.
Payment Schedule to YEIDA
Suraksha Group’s payment plan to YEIDA includes:
- First installment: Rs 133 crore within three months from the approval date.
- First year: Rs 200.15 crore.
- Second, third, and fourth years: Rs 333.8 crore each year.
Funding for Stalled Projects
To restart construction of stalled housing projects across the Delhi-NCR region, Suraksha Group will inject Rs 125 crore in equity funds. This initiative aims to provide relief to approximately 20,000 homebuyers affected by project delays.
Leadership Appointments
The new board of Jaypee Infratech Ltd. includes:
- Sudhir V. Valia: Appointed as non-executive director.
- Aalok Champak Dave: Appointed as executive director, managing director, and chief executive officer.
- Usha Anil Kadam: Appointed as independent director.
Insolvency Process and Historical Context
Jaypee Infratech has been undergoing a corporate insolvency resolution process since August 2017, initiated by an application from the IDBI Bank-led consortium. The journey to resolution involved multiple rounds of bidding and legal challenges:
- Initial Bid Rejections: The first bid by Lakshadweep, part of Suraksha Group, was rejected in 2018. Subsequent bids by Suraksha and NBCC faced rejections and legal challenges, leading to multiple bidding rounds.
- Supreme Court Intervention: In November 2019, the Supreme Court directed that revised bids be invited from NBCC and Suraksha, leading to the current resolution.
Resolution Plan Details
Suraksha Group’s resolution plan includes:
- Land and Debentures: Offering more than 2,500 acres of land and nearly Rs 1,300 crore through non-convertible debentures to bankers.
- Completion of Flats: Committing to complete all pending housing units within four years.
Voting and Approval
The acquisition was approved by the Committee of Creditors (CoC), which included 12 banks and over 20,000 homebuyers:
- Voting Outcome: Suraksha Group secured 98.66% of the votes, narrowly surpassing state-owned NBCC by 0.12%.
Future Implications
The resolution of Jaypee Infratech’s insolvency has significant implications:
- Homebuyers: Approximately 20,000 homebuyers will benefit from the resumption and completion of their delayed projects.
- Real Estate Sector: This case sets a precedent for resolving complex insolvency issues within the sector, demonstrating the effectiveness of the insolvency process.
The Suraksha Group’s acquisition of Jaypee Infratech marks a critical step forward in resolving one of India’s most challenging real estate insolvency cases. The clear payment plan, strategic leadership, and commitment to completing stalled projects promise to bring relief to stakeholders and revitalize Jaypee Infratech’s operations.