CBI action against IDBI clouds banks' Jaypee bid

Around noon on Wednesday, it appeared that only three lenders to ailing Jaypee Infratech - IIFCL, ICICI Bank and IFCI, which account for 17.5% vote share - were going to "dissent" against Valia Group's 7,350 crore bid, arguing that the offer was below the liquidation value, estimated at around 8,000 crore.

But as soon as IDBI Bank, which has over 44% say, opted against the bid, it was clear that the resolution plan would not go through, throwing the project into fresh uncertainty. The vote came as a surprise given that the plan was formulated after more than a month of extensive consultation with lenders and their advisers, and the Valia Group was declared the "preferred bidder" despite some of the banks insisting that the offer should be raised to match lquidation value.

A part from the bid being lower than the liquidation value, some lenders were of the view that terminating the Taj Expressway contract wo- uld force the UP government to cough up 11,000 crore as "termination value", which was a more attractive proposition. Although this was the view among a handful of lenders until last week, by Wednesday, IDBI Bank too bought into the argument.