MUMBAI: Real estate developers Tata Housing and the Lodha Group have filed initial bids for debt-laden realtor and road builder Jaypee InfratechBSE 1.49 %, the fate of which is now being decided at the Supreme Court and the National Company Law Tribunal (NCLT), the country’s dedicated platform for insolvency resolution.
Two people familiar with the bidding process told ET that both property companies are keen to own Jaypee’s Yamuna Expressway, a prime concrete road project that starts at the eastern end of Noida-Greater Noida Expressway and runs up to Agra. The Yamuna Expressway carries heavy traffic at a toll of slightly more than Rs 2 a kilometre for a car.
The property’s richest attraction is its extensive land bank, with facilities either proposed or already functioning in the immediate vicinity of the access-controlled motorway.
Rs 2,000 Crore Needed
India’s only operational Formula One racing track is located along the road, while the site of the capital region’s second proposed airport is close to the first toll gate from the Greater Noida end. Next to the motorway is one of the biggest urban .. campuses of a state-run university, while the mega convention centre hosting the annual Auto Expo is also adjacent to the expressway.
ET reported on January 4 that the Reserve Bank of India has ordered banks not to initiate bankruptcy proceedings against Jaiprakash AssociatesBSE 5.30 %, the parent of Jaypee Infratech, in likely anticipation of legal complications after a Supreme Court ruling barred its promoters from selling or transferring assets. The court ruling followed an appeal by homebuyers after IDBI Bank filed to start insolvency proceedings in August against Jaypee Infratech.
Jaypee Group managing director Suren Jain and the Lodha Group declined to comment on the bids for Jaypee Infratech. Tata Housing didn’t respond to ET’s queries.
While there appears to have been a big response, it’s to be seen how many of the initial expressions of interest translate into binding offers, sources said. A binding bid comes with a commitment from an interested party to purchase the assets.
“The bidders, apart from purchasing the assets, need to infuse around Rs 2,000 crore to complete the projects already taken up by Jaypee Infra,” said one of the two persons cited above.
The NCLT Allahabad bench admitted IDBI’s insolvency proceedings against Jaypee Infratech in August as it had failed to repay Rs 526 crore of loans. NCLT had appointed Anuj Jain as the interim resolution professional (IRP) to carry out proceedings under the Insolvency and Bankruptcy Code. But in September, the Supreme Court stayed the process after Jaypee Infratech homebuyers appealed.
“If real estate properties are free from litigation, it makes sense for renowned industry players to bid for such assets,” said Mamta Binani, former president of the Institute of Company Secretaries of India and an insolvency professional herself. “Any premium road project or swanky housing properties should generate good returns over a period of time if they are operated in the right fashion.”
The company’s total debt on its books was about Rs 8,300 crore, with an interest overdue of Rs 1,400 crore, as on March 31 last year. The group is now in the process of filing a resolution plan before the Supreme Court, which is expected to ensure a debt restructuring process, enabling the defaulting borrower to meet its obligation.
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