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Lenders Vote Against NBCC's Bid To Acquire Jaypee Infratech

Infra News - Published on Mon, 17 Jun 2019

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PTI reported that a majority of Jaypee Infratech's lenders have voted against NBCC's bid but most home buyers wanted the state-owned company to takeover the debt-laden realty firm. The development comes hours after the National Company Law Appellate Tribunal clarified that it has not barred lenders from voting against NBCC's resolution plan. While the exact percentage of votes in favour and against the NBCC's takeover plan was not disclosed due to an insolvency court order, the bid possibly has not mustered the requisite nod of two-third of lenders and buyers. The voting result is to be placed before the NCLAT.

In most bankruptcy proceedings, lenders have the right to vote for or against a resolution plan for a debt-laden firm. In the case of realty firms, home buyers also have voting rights at par with lenders.

As many as 13 banks and over 23,000 homebuyers have voting rights in the Committee of Creditors of Jaypee Infratech. Homebuyers represent nearly 60 per cent of voting rights, while banks have the rest. For approval of any resolution plan, at least 66 per cent votes should be in favour.

The NCLAT clarified that it has not barred lenders from voting against NBCC's resolution plan. Bankers had reservation with the NBCC's bid because of certain concession sought by the state-owned firm related to future tax liabilities and approval from development authority YEIDA for transfer of land and Yamuna Expressway.

Hearing a batch of applications filed by banks seeking permission to vote against NBCC bid, the NCLAT said, "We have not said do not vote against. We have said the CoC may not file final report on the decision, if it is rejected".

The NCLAT also directed Interim Resolution Professional Anuj Jain to report the outcome of voting process directly to it. This is the second round of bidding process to revive Jaypee Infratech, which went into insolvency in August 2017 after the National Company Law Tribunal admitted an application filed by an IDBI Bank-led consortium.

In the first round of insolvency proceedings conducted last year, the INR 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. Later in October 2018, the IRP started the second round of bidding process. Last month, the CoC rejected Suraksha Realty's bid.

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Posted By : Mohan Sharma on Mon, 17 Jun 2019
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