Suraksha Realty Hopeful Of Getting Favourable Vote On Jaypee Bid

Mumbai-based Suraksha Realty on Monday expressed confidence that bankers and homebuyers will vote in favour of its bid to acquire bankrupt realtor Jaypee Infratech Ltd., saying that the company has substantially improved its resolution plan to maximise the value for financial creditors.

A Committee of Creditors on Saturday decided that homebuyers and lenders of Jaypee Infratech will vote on the bids of state-owned NBCC (India) Ltd. and private sector firm Suraksha Realty at the same time.

Voting process will start on Dec. 10 and end on Dec. 16.

"We have worked very hard since last 1.5 years and are only player who has submitted resolution plans in all three rounds. We are fully committed to fulfill each and every commitment made under our resolution plan," Suraksha ARC Managing Director and Chief Executive Officer Aalok Dave told PTI.

Suraksha Realty is owned by Sudhir Valia, the brother-in-law of Sun Pharma promoter Dilip Shanghvi.

"We feel public sector banks being institution have larger responsibility to maximize value for lenders and home buyers as the main objective of Insolvency and Bankruptcy Code is to maximise value out of assets of the corporate debtor,” he said.

"We believe after substantial improvements for both home buyers and banks, we will get full support and positive vote from home buyers and banks as our offer is maximising value for them," he added.

Dave said the company believes that it would get better score on evaluation matrix.

According to sources, Suraksha is believed to have got nearly 44 score in the evaluation matrix while the NBCC has got nearly 43 and 22.5 marks in two scenarios.

This is the third round of bidding process, which has been initiated on the direction of the apex court.

In its latest bid, Suraksha Realty further improved its bid to acquire Jaypee Infratech by offering more land and upfront cash to lenders.

It has increased upfront payment to lenders to Rs 190 crore from Rs 175 crore offered in its revised offer submitted on Dec. 3. The land-debt swap deal has also been improved to 2,320 acre from 2,220 acre.

NBCC has offered 1,526 acres of land to lenders in its revised bid.

On Yamuna Expressway, NBCC has proposed to transfer the road asset to lenders but before that it would take loan of around Rs 2,500 crore against toll revenue to fund construction spend. Suraksha will keep expressway.

For home buyers, NBCC has proposed to complete pending about 20,000 flats in three and half years, while Suraksha in three years.

Suraksha Realty has also kept aside Rs 250 crore worth land for paying penalty to homebuyers for past delays.

In the Jaypee Infratech, NBCC has offered to infuse Rs 120 crore, while Suraksha Rs 25 crore.

As many as 13 banks and over 23,000 homebuyers have voting rights in the CoC. Buyers have around 58 percent votes. For a bid to be approved, 66 percent votes are required. Homebuyers claim amounting to over Rs 13,000 crore has been admitted by Interim Resolution Professional Anuj Jain, while banks claim is worth Rs 9,800 crore.

During the meeting of the CoC on Saturday, sources had said that ICICI and Axis Bank opposed the decision to put both the resolution plans to vote at the same time as they wanted the bid of highest bidder to be the first.

However, lenders could not finalise on H1 and H2 (second highest bidder) and therefore decided to opt for simultaneous voting.

If bids of both the parties are approved in the voting process, then winner will be decided on the basis of higher vote numbers, the sources had said.

Jaypee Infratech, a subsidiary of crisis-hit Jaiprakash Associates, went into insolvency process in August 2017 after the National Company Law Tribunal admitted an application by an IDBI Bank-led consortium.

In the first round of insolvency proceedings conducted last year, Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.

The CoC rejected the bids of Suraksha Realty and NBCC in the second round held in May-June this year.

The matter reached to the National Company Law Appellate Tribunal and then the Supreme Court.

On Nov. 6 this year, the Supreme Court directed completion of Jaypee Infratech's insolvency process within 90 days and said the revised resolution plan will be invited only from NBCC and Suraksha Realty.