On Wednesday, financial creditors of JIL chose Mumbai-based Suraksha group over state-owned NBCC for taking over the insolvent firm, giving hopes that thousands of homebuyers may finally get possession of their flats after many years of delay.
The 10-day-long voting process on the takeover proposals submitted by NBCC and Suraksha group ended on Wednesday afternoon. In a tight finish, Suraksha group got 98.66 per cent votes compared to NBCC’s 98.54 per cent.
The deal will now have to be cleared by the NCLT.
This was the fourth round of bidding to find a buyer for JIL, which went into Corporate Insolvency Resolution Process (CIRP) in August 2017. Anuj Jain is the Interim Resolution Professional (IRP) of JIL.
In its final resolution plan to take over JIL, Suraksha group has made a provision for interim finance of Rs 300 crore at a coupon rate of 12 per cent from the CoC (Committee of Creditors) approval date till NCLT approval date.
This amount is meant for construction of projects. Over 20,000 homebuyers are stuck in stalled projects of JIL in Noida and Greater Noida, Uttar Pradesh.
“Homebuyers read the bids properly and understood the challenges…Though it was SREI who assented for Suraksha and dissented for NBCC but even 7,796 homebuyers voted for Suraksha, unlike last time’s 3,514.
“Now we just pray for the smooth approval of plan in NCLT (National Company Law Tribunal) so that the construction starts with full swing,” said Ashish Mohan Gupta, who owns a flat in Wish Point project in the Wish Town township.
Gupta, which also petitioned in NCLT, NCLAT and the Supreme Court against approval of the NBCC’s resolution plan last year, said Suraksha group should provide interim finance with the approval of the CoC and IRP Anuj Jain.
However, Gupta said the interest rate of 12 per cent is high and asked Suraksha group to lower the rate to 8 per cent.
Another home buyer Sanjeev Sahani echoed the views, saying Suraksha group should provide interim funds for construction of projects.
Rashmi Singhal, a home buyer, said the resolution plan of Suraksha was better than that of NBCC.
She also said the management of Suraksha regularly held webinars with homebuyers and incorporated many changes in its bid to protect the interest of homebuyers.
Singhal hoped the construction work will start immediately as per the plan. “We have been stuck for last 10-11 years. We hope to get our apartments this time,” she added.
Mukesh Gupta, who has an apartment Kenigston Boulevard, expressed relief that homebuyers have got resolution now.
He said Suraksha group is giving 150 acres land for delay penalty and is also including all claims of homebuyers submitted till the approval of the NCLT.
He also said the IRP should take the Rs 300 crore interim fund from Suraksha group to start construction immediately.
After the CoC approval, Suraksha group’s offer has to be cleared by the NCLT.
A successful resolution of JIL will provide big relief to over 20,000 homebuyers across various housing projects launched by the realty developer in Noida and Greater Noida (Uttar Pradesh).
As many as 12 banks and more than 20,000 homebuyers have voting rights in the CoC. At least 66 per cent votes are required for the approval of a bid.
In its final bid, Suraksha group has promised to complete delivery of units to homebuyers over a period of 40 months.
It has set aside 150 acre land at Tappal with fair value of Rs 279 crore in lieu of past delay penalty to be paid to homebuyers.
That apart, another Rs 15 crore has been provided for early payment discount to eligible homebuyers.
Suraksha group has also offered to consider all homebuyers’ claims filed before the NCLT approval date.
After it acquires JIL, the company will infuse Rs 3,000 crore as working capital. An upfront equity infusion of Rs 125 crore and loan of Rs 125 crore from group company within 90 days have also been offered.
For institutional financial creditors which have submitted a claim of Rs 9,783 crore, Suraksha group has provided 2,552 acre under debt-land swap scheme. The Fair Value (FV) of these land parecels is estimated at Rs 6,456 crore.
The company has also offered to issue non-convertible debentures worth Rs 1,280 crore to assenting creditors. These NCDs would be redeemable in 8 yearly instalments of Rs 160 crore, starting from the third year till the 10th year.
JIL went into the insolvency process in August 2017 after the NCLT admitted an application by an IDBI Bank-led consortium.
In the first round of insolvency proceeding, the Rs 7,350-crore bid of Lakshadweep, part of Suraksha group, was rejected by lenders. The CoC had rejected the bids of Suraksha Realty and NBCC in the second round held in May-June 2019.
The matter reached the National Company Law Appellate Tribunal (NCLAT) and then the apex court.
In November 2019, the Supreme Court directed that the revised bids be invited only from NBCC and Suraksha.
Then in December 2019, the CoC approved the resolution plan of NBCC with 97.36 per cent votes in favour during the third round of the bidding process.
In March 2020, NBCC had got approval from the NCLT to acquire JIL. However, the order was challenged before the NCLAT and later the Supreme Court, which on March 24 this year ordered that fresh bids should be invited only from NBCC and Suraksha.