NBCC has also assured home buyers of completing pending projects within 3 years if its bid gets accepted.
MUMBAI: State-run NBCCNSE -0.62 % has informed home buyers of crisis-hit realty developer Jaypee Infratech that it would rely on monetising the latter’s assets rather than putting own funds to complete the stuck projects. NBCC also assured the home buyers of completing the pending projects within 3 years if its acquisition bid gets accepted.
The assurance came on a query from one of the homebuyers that NBCC in its resolution plan had proposed infusing only Rs 500 crore into Jaypee Infratech against which it would get 2,000 acres and 6,000 units of unsold, or unclaimed home units.
Two companies — NBCC and Suraksha Asset Reconstruction Company — have submitted separate bids to acquire Jaypee Infratech under the Insolvency & Bankruptcy Process.
About 250 home buyers from 9 associations representing total 9,000 buyers met the management of NBCC to seek clarity on project completion schedule and financing. The meeting took place following a request by these homebuyers.
“It is for the first time a public sector undertaking (PSU) is bidding to safeguard or resolve issues of home buyers. Our aim is to get you relief, but as a company also we wouldn’t want to incur losses,” Anoop Kumar Mittal, CMD, NBCC, told home buyers. “We will definitely try and give your home within 3 years, and will further try to reduce the timelines.”
The buyers also suggested that a forensic audit of Jaypee Infratech needs to be conducted. However, NBCC declined to comment on this.
In a meeting held on March 1, lenders of Jaypee Infratech had also sought clarity from NBCC on its bid to acquire the company. The Committee of Creditors (CoC) also asked if the company can complete the stuck projects in less than five years.
Jaiprakash Associates, promoter of the stressed realty developer, has also submitted a proposal to lenders of its subsidiary to settle their dues. Lenders are likely to hold more meetings with the bidders before taking a final call.
Jaypee Infratech has an outstanding debt of about Rs 9,800 crore. Its lenders include IDBI, IIFCL, Axis Bank, Bank Of MaharashtraNSE -0.74 %, Corporation BankNSE -1.05 %, ICICI BankNSE -0.34 %, IFCI, J&K Bank, LIC, SBI, Syndicate BankNSE -4.62 %, Srei Equipment Finance, and Union Bank.
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 BankNSE -0.93 % under Section 7 of IBC, 2016. Jaypee had defaulted on a Rs 526-crore loan by the bank.
In 2017, the NCLT admitted the application of an IDBI Bank-led consortium seeking resolution of Jaypee Infratech’s debt under the Insolvency and Bankruptcy Code.
Lakshadweep, which is part of the Suraksha Group, subsequently emerged as the frontrunner to acquire the firm. However, in May last year, lenders rejected its Rs 7,350-crore bid, as they found it to be inadequate. On the National Company Law Tribunal’s direction, Jain started a fresh initiative in October 2018 to revive the company that has several stuck housing projects in Noida and Greater Noida.
A subsidiary of Jaypee Group flagship firm Jaiprakash AssociatesNSE -4.10 %, Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 units.