NARCL offers to pay Rs 3500 crore for Jaypee Infra bad debt

20 Sep 2022 , 08:50 AM

The largest account for which NARCL has made a proposal to date is for the debt of Jaypee Infrastructure. State-backed National Asset Reconstruction Company Ltd (NARCL) has offered to pay Rs3,500 crore.

Lenders received the information at a meeting on Monday. Now, each lender will assess the strategy on their own and report their findings to the NARCL.

“The lead bank, in this example IDBI Bank, has received the offer and will now convene joint lenders meeting (JLM) to review it with other banks. Depending on the comments banks currently provide ” stated an ET news report.

One of the first 12 businesses the Reserve Bank of India (RBI) referred to the National Company Law Tribunal (NCLT) in August 2017 under the Insolvency and Bankruptcy Code (IBC) was the real estate and infrastructure firm Jaypee Infratech.

It owes a total of Rs22,600 crore to banks led by IDBI Bank. The company’s lenders have been looking for a buyer for four years and have already accepted a proposal put up by Suraksha Realty that calls for a recovery of Rs7,936 crore and a 65% haircut. Although Suraksha’s offer is higher than NARCL’s, lenders will also take the much-delayed plan’s lack of certainty into consideration.

The procedure is that NARCL will now make a legally-binding offer to lenders, and then, after receiving agreement from the other banks in the consortium, the lead bank will undertake a Swiss challenge that will allow competitors to the NARCL proposal. If a counteroffer does surface, NARCL will be given an option to match it.

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