Lenders to Jaypee Infratech Ltd have voted against NBCC (India) Ltd’s revised bid to take over the debt-laden real estate developer.
The decision was taken hours after the National Company Law Appellate Tribunal (NCLAT) clarified that it had not barred lenders from voting against NBCC’s resolution plan.
A majority of the 13 lenders voted against the NBCC bid, but most homebuyers wanted the state-owned company to be the new buyer, a bank executive told VCCircle, asking not to be named. “As bankers, we cannot approve the conditions put forth by NBCC,” the person said.
In most bankruptcy proceedings, lenders have the right to vote for or against a resolution plan for a debt-laden firm. However, in the case of real estate companies, homebuyers also have voting rights on a par with lenders.
The banker said the NBCC’s conditions included a waiver and concessions on the tax liabilities, taking over the unsold flats and transfering the Yamuna Expressway project to itself. “We cannot agree to take all the liabilities in a distress sale. The Yamuna Expressway project requires approval from government authorities.”
Apart from the lenders, more than 23,000 homebuyers have voting rights in the Committee of Creditors (CoC) of Jaypee Infratech. Homebuyers represent nearly 60% of voting rights while banks have the rest.
The exact percentage of votes in favour and against the NBCC's takeover plan was not disclosed due to an insolvency court’s order, but people familiar with the matter said the bid didn’t get the minimum 66% votes that are required for a resolution plan to go through.
Earlier on Monday, hearing a set of applications filed by banks, the NCLAT clarified that it had not barred lenders from voting on NBCC's resolution plan. The appellate tribunal also directed Interim Resolution Professional (IRP) Anuj Jain to report the outcome of voting process directly to it.
This was the second round of bidding to revive Jaypee Infratech, which went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted an application filed by an IDBI Bank-led consortium.
The CoC had decided to vote on NBCC’s revised bid on May 30 after rejecting the offer by a consortium led by Suraksha Realty.
However, bankers had reservations against the NBCC proposal. Last week, lenders filed a petition before the NCLAT to allow them to vote on NBCC's bid. A three-member bench headed by Chairman Justice S J Mukhopadhaya directed that the voting process should be completed.
Bankers will now await the NCLAT decision whether to call for a fresh round of bidding or whether they can consider the unsolicited bid by an Adani group arm to buy Jaypee Infratech.
Adani Infrastructure & Developers Pvt. Ltd had submitted a non-binding offer at the end of May to take over Jaypee Infratech by making an upfront payment of at least Rs 500 crore.
The NCLAT has now advanced the date of next hearing to July 2 from July 17.
