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It’s official! NBCC is taking over Jaypee Infratech

State-owned NBCC Limited got a nod from the NCLT to acquire debt-ridden Jaypee Infratech which was undergoing insolvency process
New Delhi: State-owned NBCC Limited got a nod from the NCLT (National Company Law Tribunal) on Tuesday to acquire debt-ridden Jaypee Infratech which was undergoing insolvency process. NBCC will now begin the task of completing around 20,000 unfinished flats, which had been promised to Jaypee Infratech buyers, over the next three-and-a-half years. During a hearing, the Principal bench of NCLT, headed by acting president BSV Prakash Kumar, gave a go-ahead to the resolution plan of NBCC.

Rs 750 cr deposited by Jaypee Infratech parent firm will go to NBCC

In a significant decision that will help NBCC in faster completion of the incomplete projects, the NCLT said that the Rs 750 crore deposited by Jaypee Infratech's parent firm Jaiprakash Associates Ltd (JAL) with the registry of the Supreme Court would be part of the resolution plan. “Rs 750 crore would be treated as part of the plan,” the bench said and added that the resolution plan has been approved with modification. The written order will be available on March 4.

NBCC’s bid

In its bid, NBCC had offered to complete over 20,000 stuck flats in housing projects started by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh). Homebuyers’ claim amounting to Rs 13,364 crore and lenders’ claim worth Rs 9,783 crore were admitted. The state-run company had also offered 1,526 acres of land to lenders under a land-debt swap deal. On Yamuna Expressway, NBCC proposed to transfer the road asset to lenders but before that it would take a loan of around Rs 2,500 crore against toll revenue to fund construction spend.

The backdrop

Homebuyers had been wanting NBCC to take over the incomplete housing projects because it is a public sector company and has experience in developing large projects and townships in the national capital region. Jaypee Infratech, a debt-ridden subsidiary of Jaiprakash Associates, went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted a plea filed by a consortium of lenders led by IDBI Bank.