Jaypee Infratech lenders to meet on May 7 to consider Lakshadweep bid

Lenders of Jaypee Infratech will meet on May 7 to consider Lakshadweep Pvt Ltd’s ₹7,350 crore bid to acquire the debt-laden firm, banking sources said.

Jaypee Infratech is facing insolvency proceedings after it defaulted on loan repayments. The National Company Law Tribunal (NCLT) had last year admitted the application by an IDBI Bank-led consortium seeking resolution for Jaypee Infratech under the Insolvency and Bankruptcy Code.

According to banking sources, the Committee of Creditors (CoC) will meet on May 7 to consider the ₹7,350 crore resolution plan submitted by Lakshadweep to acquire Jaypee Infratech, a subsidiary of Jaypee group’s flagship firm Jaiprakash Associates.

Jaypee Infratech currently has about ₹24,000 crore worth assets while its debt is nearly ₹10,000 crore, they said, adding that even the liquidation value is worth about ₹14,000 crore.

The assets, which include land parcels, Yamuna Expressway and a hospital, can be monetised to protect the interest of creditors, about 30,000 homebuyers and a large number of minority shareholders, sources said.

Jaypee Infratech has about 3,300 acres of vacant land parcels worth about ₹14,000 crore alongside the Yamuna Expressway that connects Noida and Agra. It also has unsold housing stock of about ₹1,500 crore and licensed saleable area (called FSI) worth ₹3,000 crore, they added.

The expressway could be divested for about ₹4,500-5000 crore, while the value of operational hospital in Noida is estimated at about ₹1,000 crore, sources said.

Moreover, Jaypee group has already submitted ₹650 crore in the registry of the Supreme Court and it has been asked to deposit ₹100 crore more by May 10. The amount will be used to refund home buyers.

Jaypee Infratech is developing about 32,000 flats in Noida and Greater Noida region and out of that it has delivered 9,500 apartments. For giving possession of another 4,500 flats, it has applied for occupancy certificates.

The company plans to deliver the remaining 18,000 flats by 2021. It needs ₹6,500 crore to construct these flats while ₹4,000 crore is receivables from customers, leaving a shortfall of ₹2,500 crore.

Jaypee Infratech is currently investing ₹50 crore a month to complete these units, sources said, adding that more funds were needed to meet the 2021 deadline.

Sources had earlier said that Lakshadweep Pvt Ltd, a joint venture between Sudhir Valia-led Suraksha Asset Reconstruction Company and Mumbai-based Dosti Reality, has offered ₹1,200 crore in cash to the banks, ₹4,000 crore worth land parcel and the rest in form of long-term non-convertible debentures in the insolvency auction. A small equity stake to lenders is also part of the offer.