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Jaypee Infratech lenders to take a vote on NBCC bid starting May 31

Following a request by Jaypee’s lenders, the government-owned firm had accommodated some of the concerns voiced by the CoC and had made changes to its bid
New Delhi: At a meeting of the Committee of Creditors of debt-ridden Jaypee Infratech, it was decided that state-run NBCC’s offer to take over the realty firm and complete construction of over 20,000 flats will be put to vote, starting from May 31 to June 10, sources said. The news comes a day after Adani Group submitted a far more lucrative bid to acquire Jaypee Infratech to the CoC. The beleaguered firm’s lenders took the decision following an order from the National Company Law Appellate Tribunal (NCLAT) in which it had asked the CoC to renegotiate the bid with NBCC by May 30, so that the voting could start from May 31. The NCLAT had objected to the bid submitted by NBCC because it was non-binding and conditional.

Did NBCC re-work its proposal?

Following a request by Jaypee’s lenders, the government-owned firm reduced the value of unsold inventories offered to lenders by around 25 percent, sources said. It also proposed to reduce the value of unsold inventories offered to lenders to Rs 1,300 crore from earlier Rs 1,750 crore. Banks had shown reluctance towards acquiring over 2,000 unsold flats, as had been proposed by NBCC in its bid document.

No other conditions diluted

Source, however, said that NBCC did not dilute any other conditions in its offer, especially what had been sought by the CoC earlier — exemption from future tax liability. In the revised offer submitted by NBCC, the PSU had proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore to banks and completing construction of flats by July 2023 to settle an outstanding claim of Rs 23,723 crore of financial creditors. But it had also introduced several conditions in its proposal, including a demand to extinguish an estimated income-tax liability of Rs 33,000 crore over a period of 30 years arising out of the transfer of land parcels from Yamuna Expressway Industrial Development Authority (YEIDA) to Jaypee Group and seeking permission from YEIDA for any business transfer.