The SC had on May 16 asked the promoters of the company to deposit Rs 1,000 crore with the registrar of the company.
Jaypee Infratech, ordered by Supreme Court to deposit Rs 1,000 crore till June 15, has failed to carry out the apex court’s directive with the company’s promoters choosing to not pay even as the deadline expired on Friday, sources told Moneycontrol.
But the Noida-based company is preparing an alternative plan under which it is talking to YES Bank and Deutsche Bank to secure funds, sources said.
"In the interest of home buyers, we are submitting an appropriate proposal before the Supreme Court for directions," a top Jaypee official told Moneycontrol, without revealing finer details of the proposal.
The SC had on May 16 asked the promoters of the company to deposit Rs 1,000 crore with the registrar of the company. This was in addition to its last year’s order to deposit Rs 2,000 crore. The company has so far deposited Rs 750 crore against the previous directive.
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“It was going to be impossible for the company to pay another Rs 1,000 crore in a month’s time. If it had that kind of money, it wouldn’t be in this situation in the first place. So now, it is going to submit a fresh proposal to the court when it reconvenes on July 4 after the summer break,” one of the sources said.
Another source said the company was talking to YES Bank and Deutsche Bank to arrange funds and one or both could agree. This is not the first time the Manoj Gaur-led company is talking to these two banks. Earlier also, the two had expressed interest in funding the Jaiprakash company.
The company had earlier submitted a Rs 10,000-crore proposal to its creditors under which it also promised to complete the remaining 18,000-19,000 flats in three years. The new proposal is likely to centre around that plan, another source said.
Jaypee Infratech owes Rs 9,094.31 crore to a consortium of over a dozen banks led by IDBI Bank. The state-owned lender alone has a 44.3 percent share in Jaypee’s total debt.
Hopes for the Gaurs have seesawed in the last six one year as the Gaurs try to salvage the Jaiprakash subsidiary that holds vast tracts of land in Noida, Agra and along the 167-km-long Yamuna Expressway. There are some 18,000-19,000 homebuyers awaiting the delivery of their flats for seven-to-eight years.
Jaypee Infratech was one of the 12 companies in the first ever list that Reserve Bank of India prepared as cases that needed immediate resolution of their debt under the Insolvency and Bankruptcy Code. Jaypee’s case was referred to the Allahabad bench of the National Company Law Tribunal which appointed an insolvency resolution professional to prepare a rescue plan for the company. The 270-day deadline to find a solution to the company’s debt problems under IBC lapsed on May 12.
As per IBC, a company has to be sent for liquidation if no solution is found within that time but not so in this case. This is because the company’s matter was also being heard at the SC under ‘public interest’.
In further attempt to secure the interest of hapless home buyers who have booked houses in the various real estate projects of Jaypee, the government brought them at par with financial creditors.
Under the previous code, banks, being secured lenders to the company, had the first right to the company’s cash and other assets. The law is still not clear whether home buyers will be treated as secured or unsecured lenders but certainly, they are in a better position now and with the matter being at SC, home buyers can still keep their hopes alive.
There were three bidders in race to buy Jaypee Infratech — Lakshadweep, the Adani group and Kotak Realty Fund-Cube Highways.
In the end, only Lakshadweep, a joint venture of Sudhir Valia-led Suraksha Asset Reconstruction Company and Mumbai-based Dosti Realty, was left in the fray but its Rs 7,000-crore offer was also ultimately rejected by a committee of creditors – over a dozen lenders of Jaypee — as being too low.
According to a note prepared by IDBI Bank, the value of just the immovable assets mortgaged to the IDBI consortium is Rs 17,116 crore while their distress value is pegged at Rs 14,548 crore. Lakshadweep’s Rs 7,000 crore bid pegged Jaypee’s value at less than half of IDBI’s distress scenario number.