SynopsisAround 20,000 home buyers have been waiting to get delivery of their homes following the Allahabad bench of the NCLT classified Jaypee Infratech as insolvent on the petition filed by IDBI Bank under Section 7 of IBC, 2016. Jaypee had defaulted on Rs 526-crore loan by the bank.
Key lenders including public sector banks, the second largest stakeholders in Jaypee Infratech’s insolvency process, have assured homebuyers of the beleaguered realty developer that they are keen on resolution on merit basis and don’t prefer the liquidation option.
Jaypee Infratech’s Committee of Creditors has decided to conduct a voting to get homebuyers and lenders’ consent for a 7-day extension to both the bidders–NBCC and Suraksha Group to submit their revised resolution plans.
This voting, which requires total 51% consent from homebuyers and creditors, will take place on Thursday and Friday. This is the first time since the insolvency process started that the homebuyers will have the power to select the bidder.
The voting will decide if they would take the Suraksha plan without any extension or reopen the process.
Homebuyers hold a total 57% voting rights in the process, and public sector banks have assured them of their support.
“We (homebuyers) are in touch with public sector banks and they have assured us that a resolution is what they prefer and will support homebuyers’ decision as the government is also keen on ensuring homebuyers get delivery of their homes soon,” said Jayashree Swaminathan, one of the homebuyers in Kensington Park Heights. “We are fed up with this long wait, we hope the resolution takes place soon without any further litigation.”
The government is also looking to resolve the issues of homebuyers and lenders, without any interference, through an open and transparent process being conducted under the Insolvency & Banking Code and as per directions of the Supreme Court.
This was one of the first 12 cases referred by the Reserve Bank of India to the NCLT in 2017.
“We are aware that the government only wants homebuyers to get homes whether it’s Suraksha or NBCC, as per a fair and transparent process. Large PSU banks that we have interacted with have also extended their support to us. We are looking for a resolution without any delay as we have already suffered for more than a decade,” Ashish Rastogi, President of Krescent Homes Buyers Association.
Apart from a 7-day extension to submit revised plans, homebuyers and creditors will also be voting on Thursday to decide on a 30-day extension for completion of the process.
However, homebuyers are concerned about fresh negotiations, evaluation, compliance check, finalisation of resolutions leading to further delay.
The CoC was expected to start the voting on Suraksha’s resolution bid on Monday, after examining a revised bid by NBCC on the same day, which inserted an addendum in its resolution plan to make it compliant with IBC.
Homebuyers in Jaypee Infratech’s projects have already raised their concerns over likely delay in the insolvency resolution process of the company following NBCC’s insistence on considering its bid for voting.
Based on the plans submitted so far, Suraksha has proposed to offer Rs 6,984 crore to lenders, while NBCC had offered Rs 5,248 crore to them, showed a fair market valuation report. Suraksha has also offered land worth Rs 400 crore to homebuyers for the past delays. Both have proposed to complete the stuck projects in 42 months.
Around 20,000 home buyers have been waiting to get delivery of their homes following the Allahabad bench of the NCLT classified Jaypee Infratech as insolvent on the petition filed by IDBI Bank under Section 7 of IBC, 2016. Jaypee had defaulted on Rs 526-crore loan by the bank.
In 2017, the NCLT had admitted the application of an IDBI Bank-led consortium seeking resolution of Jaypee Infratech’s debt under the Insolvency & Bankruptcy Code. Jaypee Infratech has a debt obligation of over Rs 9,800 crores to the IDBI Bank-led consortium. Homebuyers’ claims amount to Rs 12,714 crore.
The admitted financial debt out of the total claims filed by the creditors is Rs 22,613 crore including homebuyers’ claim.
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