The Supreme Court (SC), today, has stayed the liquidation process of Jaypee Infratech Ltd (JIL) and has asked its promoter group Jayprakash Associates Ltd (JAL) to deposit Rs1,000cr by June 15, 2018.
SC has asked JAL to deposit the money for ensuring refund of money to homebuyers who were left in a lurch after JIL was classified as insolvent after it defaulted on a loan of Rs526cr to IDBI Bank. The apex court reiterated that liquidation proceedings against the JIL would remain stayed after submission of the said amount.
This verdict by the SC was in response to the application filed by the Interim Resolution professional (IRP), which stated that the bankruptcy resolution process for JIL was unsuccessful. According to the Insolvency and Bankruptcy Code, 2016, a resolution plan must be finalised and approved within 270 days of a company’s admission to the National Company Law Tribunal. For JIL, the deadline ended on May 12, 2018.
Last week, the Committee of creditors rejected a bid by Lakshwadeep Investments and Finance Pvt Ltd as less than 75% of the lenders voted in favour of the bid. The Resolution plan was considered by the committee of creditors (CoC) in its meeting held on May 7, 2018 and put to e-voting on 8th and 9th of May 2018.
More than half a dozen members of Jaypee Infra’s CoC, who together have 40% share in its outstanding debt, had raised serious concerns over the valuation of assets and repayment structure proposed by Lakshwadeep. According to a note prepared by IDBI Bank, Jaypee Infra's largest lender, the company's actual value stands at Rs17,111cr, while its distress value is pegged at Rs14,548cr. Lakshadweep's Rs7,000cr bid pegged Jaypee Infra's value at less than half of IDBI's distress scenario number.
JIL has an outstanding debt of about Rs9,800cr. Its lenders include IDBI, IIFCL, Axis Bank, Bank of Maharashtra, Corporation Bank, ICICI Bank, IFCI, J&K Bank, LIC, SBI, Syndicate Bank, Srei Equipment Finance and Union Bank.
Jaypee Infratech Ltd ended at Rs5.69 up by Rs0.18 or 3.27% from its previous closing of Rs5.51 on the BSE.